vacancies advertise contact news tip The Vault
facebook rss twitter

Nokia issues sales warning – shares spanked

by Scott Bicheno on 31 May 2011, 16:43

Tags: Nokia (NYSE:NOK)

Quick Link: HEXUS.net/qa56a

Add to My Vault: x

Waiting for WP7

Finnish mobile phone giant Nokia saw fit to issue a stock exchange release today, anticipating sales from its devices and services division will be ‘substantially' below its previously expected range of € 6.1 billion to € 6.6 billion for the second quarter. This is due to lower than expected prices and volumes, which weren't exactly bullish to start with.

Additionally Nokia will also fall substantially short of its previously expected margin range of 6-9 percent, and now expects to break even on the quarter.

Three main factors were identified for this shortfall. 1 - market trends, especially in China and Europe, 2 - a product mix shift towards lower priced devices, and 3 - pricing tactics by Nokia and certain competitors. This seems to amount to what we already knew - Nokia is not currently a smartphone player and is forced to sell its feature phones at increasingly low prices.

"Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition," said Stephen Elop, president and CEO of Nokia. "Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011."

That just about sums it up - Nokia is betting everything on WP7 and, until then, it will continue to lose smartphone market share and be reliant on the sub £100 market for sales. Such is the diminishing demand for non-smartphones, Nokia must have to be selling these with very little margin.

Given that things are so much worse than previously thought, Nokia says its outlook for the full year is no longer valid. Markets have reacted badly to all this gloomy news, sending Nokia's shares down over 16 percent at time of writing to their lowest level in 13 years.

 



HEXUS Forums :: 11 Comments

Login with Forum Account

Don't have an account? Register today!
Hands up if you're as blind as a bat and didn't see that coming!






No? Anyone?

Strategy transitions are difficult…
And some strategies are just incompetent.
aidanjt
And some strategies are just incompetent.
What are you saying they should have done? At the point elop came around I mean.

They had seen nothing on their mego platform. Symbian was just a turd, it in a way makes programming iOS look pleasant, there is no worse insult for a dev platform than that.

If they had gone droid they would have been head to head with these big Chinese firms, the ones who are making the nock off nokias right now.

I think they way they announced it was silly, they should have just dicked over their partners and not told anyone until it was more imminent.
They should have brought out Touchscreen phones years ago!

They didn't and LG and Samsung and HTC gained the market.
Been saying this for years…Nokia phones just aren't fashionable anymore! I don't know anyone with any tech knowledge that has been pleased with their Nokia for years compared to the competition..
I do. But then she has actual tech knowledge, and being a dwm user, her N900 suits her..

Sadly, now that Nokia are WP7 exclusive, Nokia has neither sex nor geek appeal any more. They're just finished. No doubt the vultures are just waiting for their stock to hit rock bottom before snapping it up.