Nokia’s Q2 profit plunges 40 per cent
By Jenny • Jul 23rd, 2010 • Category: Industry News, Nokia
- Photo: Stock.Xchng
We imagine those who are not financially inclined are getting tired of all these quarterly reports doing the rounds this week, but they’re incredibly important. They don’t only give an indication of a company’s financial health and relevance to consumers, but they also give clues on what the company’s future plans are. Nokia, for their part, are in bad shape, with the company banking on the Nokia N8 to spearhead a resurgence of sorts.
Tons of phones shipped, still not enough
In Q2 2010, Nokia shipped 111.1 million mobile phones. Smartphones accounted for 24 million of that total, representing a 12 per cent sales increase from the preceding quarter. These sales meant Nokia’s net sales were slightly above €10 billion.
The problems
The problems from those admittedly impressive phone shipment numbers are many-fold, though. Though revenue grew a measly 1 per cent, Nokia’s market share fell from 35 per cent to 33 per cent. Also, the average price per device fell. Furthermore, Nokia’s net profit derived from these sales plunged 40 per cent to €227 million from €380 million during the same period last year, with the company’s only savings grace with analysts being it forewarned everybody about this.
The smartphone conundrum comes right back
The problem for Nokia isn’t in selling mobile phones, if those numbers are anything to go by. The problem for the company is which mobile phones it is selling, or more specifically, which category of mobile phones it is selling.
- Photo: Nokia
It is well known that smartphones have much higher margins and profit per unit than feature phones – particularly where a good app eco-system follows. Nokia’s Ovi store has comparatively little traction and its smartphones lineup is struggling against the competitors’ offerings.
CEO says N8 represents a new day
Nokia’s CEO, Olli-Pekka Kallasvuo explained that this was the end of the bad, and the beginning of the good for Nokia, off the back of the Nokia N8. He said: ‘We are approaching the end of this painful product transition at the high end of our product portfolio’. He concluded by claiming that ‘The N8 will mark the beginning of our renewal. As we go forward I believe we will regain high-end leadership in our industry.’ Hmm, the Nokia N8, huh? Either he is blissfully unaware or he knows something that we don’t. Perhaps that’s why the rumours of an unceremonious exit have begun gathering steam.
Tags for this article: Nokia, smartphones
Nokia n8 is something Apple can just be dreaming of. N8 has hd-video shooting and dolby surround. It has 12 megapixel camera with xenon flash. It is multitasking and faster than the Iphone. And you won’t need any jesustape to fix it:)