Nokia's earnings disappoint as it struggles to combat Apple's iPhone
Finnish cellphone maker Nokia conceded this week that it faces "tough" competition in the high-end smartphone realm, as its disappointing quarterly earnings were a stark contrast from yet another blockbuster quarter for Apple and the iPhone.
Nokia this week revealed that earned 349 million euros, or $465 million, in the first quarter of 2010. Though that was an increase from the 122 million euros earned a year prior, it was also short of estimates expected by analysts due to lower-than-expected mobile device sales.
According to the Financial Times, Nokia conceded that its best handsets are struggling to compete in the high-end market. The company said the average selling price of its phones dropped to 62 euros, down from 66 euros. Smartphones prices saw a large drop, down from 190 euros a year ago to 155 euros in the first quarter of calendar 2010.
"We continue to face tough competition with respect to the high end of our mobile device portfolio," Nokia Chief Exeuctive Olli-Pekka Kallasvuo said
Nokia is still the overall worldwide market leader in both smartphones and total cell phones, but it has lost significant ground since Apple entered the market in 2007. Those losses are widely believed to have inspired Nokia to sue Apple over the alleged use of 10 patented wireless standards in the iPhone.
Apple responded to Nokia with its own lawsuit, accusing the Finnish company of infringing on 13 iPhone-related patents. The battle of the two smartphone giants is expected to drag out for years, with both companies looking for a court hearing to be held in 2012. The U.S. International Trade Commission -- the group with which the complaints were filed -- has agreed to look into both Nokia's and Apple's complaints against the other.
Nokia's earnings reveal this week is in sharp contrast to Apple's own record-setting second fiscal quarter of 2010. On Tuesday, Apple announced its highest-ever quarterly iPhone sales at 8.75 million, topping the previous holiday quarter, based on strong international growth of the handset. The strong iPhone sales propelled Apple to a nearly 90 percent increase in profits, exceeding analyst expectations and pushing the company's stock price to new heights.
Nokia this week revealed that earned 349 million euros, or $465 million, in the first quarter of 2010. Though that was an increase from the 122 million euros earned a year prior, it was also short of estimates expected by analysts due to lower-than-expected mobile device sales.
According to the Financial Times, Nokia conceded that its best handsets are struggling to compete in the high-end market. The company said the average selling price of its phones dropped to 62 euros, down from 66 euros. Smartphones prices saw a large drop, down from 190 euros a year ago to 155 euros in the first quarter of calendar 2010.
"We continue to face tough competition with respect to the high end of our mobile device portfolio," Nokia Chief Exeuctive Olli-Pekka Kallasvuo said
Nokia is still the overall worldwide market leader in both smartphones and total cell phones, but it has lost significant ground since Apple entered the market in 2007. Those losses are widely believed to have inspired Nokia to sue Apple over the alleged use of 10 patented wireless standards in the iPhone.
Apple responded to Nokia with its own lawsuit, accusing the Finnish company of infringing on 13 iPhone-related patents. The battle of the two smartphone giants is expected to drag out for years, with both companies looking for a court hearing to be held in 2012. The U.S. International Trade Commission -- the group with which the complaints were filed -- has agreed to look into both Nokia's and Apple's complaints against the other.
Nokia's earnings reveal this week is in sharp contrast to Apple's own record-setting second fiscal quarter of 2010. On Tuesday, Apple announced its highest-ever quarterly iPhone sales at 8.75 million, topping the previous holiday quarter, based on strong international growth of the handset. The strong iPhone sales propelled Apple to a nearly 90 percent increase in profits, exceeding analyst expectations and pushing the company's stock price to new heights.
Comments
Had to beat that other dude to the punch!
Nokia is increasingly living in a bubble.
They just don't seem to get it, or if they do, have no clue as to what to do.
Apple is doomed...
Had to beat that other dude to the punch!
Doesn't count, since you forgot the ?
"We continue to face tough competition with respect to the high end of our mobile device portfolio," Nokia Chief Exeuctive Olli-Pekka Kallasvuo said
They certainly do. Between Android's feature dominance and Apple's loyal fans, Nokia is not in a good spot right now.
They have great products. And in most of the world, they own the markets. But the markets are changing, and they need to step up efforts to rebuild their lead.
[and hopefully i'll be getting my next iPhone with a verizon contract, too]
Oflife: i bet you think these designs are inspired...
Doesn't count, since you forgot the ?
/doh!
Oflife: i bet you think these designs are inspired...
<abominations snipped>
Thanks - I was trying to find examples of some of Nokia's past transgressions, and those two images fit the bill.
Now if someone can dig up the interview with their arrogant CEO from a half year ago or so...
I feel badly for the company -- it was such a world-beater at one point.
Nokia is increasingly living in a bubble.
They just don't seem to get it, or if they do, have no clue as to what to do.
The main thing about Apple that I like is that they're always looking to the future and not holding on to the past. Not only is Symbian trash but previews of their next-gen OS is trash. I'd buy Palm for WebOS if I was them.
Another thing Nokia has to learn (from Apple) is not to throw a thousand features into a phone just for a talking point. Make sure the features you introduce actually work well, if not the best in class. Less is more.
Oh yeah. Get a proper hardware designer.
My brother had a blackberry, and I thought it was the ugliest industrial design since The Gremlin. But it was at least functional, in a stylus, little plastic keyboard sort of way.
I had no idea there was a better way to do the phone thing, and when Apple did announce and show the iPhone - obviously I wasn't the only person blown away.
But exactly what were all these giant mobile phone companies that had massive tech groups, and R&D budgets doing, other than counting money??? They did next to nothing to develop a useful design that married the various technologies.
If you were associated with those companies, and in an area of technical responsibility or product design you really shouldn't be allowed to work in a tech based industry again...OK that's a little harsh, but it took a computer company with NO CELL PHONE experience to kick this industry in the butt. And now, what is the form everyone is taking? And the elements present? I went to a store and tried out some Android phones the other day, believing they were as good as an iPhone after reading about them.
They aren't. I don't care WHAT the system is running or what tech. specs they have, they feel pretty shoddy and the user interface feels glued together. I'm not spreading hate on Android here, I'm just saying they have a lot of catching up to do, just like Nokia.I hope Android improves and the handsets improve, but given the state of the manufacturers Google better just make their own phones from top to bottom if they want to match the quality of an iPhone.
There is bugger all they can do except jump on the Android bandwagon. Quicker they except this the better.
I was surprised to hear that they developed a new OS. I don't think there is much room for a new phone OS right now.
I wouldn't be surprised if they released a few cool Android phones. But I don't think that would be their main strategy.
I just bought my kid a Nokia Surge to replace his lost iPhone. It is what he wanted, given that he texts all day and all night. It is what his friends all have.
Dunno if there is lots of money to be made in the midrange market or not, but if Nokia wants to compete at the top end, they need to do something major.
The main thing about Apple that I like is that they're always looking to the future and not holding on to the past. Not only is Symbian trash but previews of their next-gen OS is trash. I'd buy Palm for WebOS if I was them.
Another thing Nokia has to learn (from Apple) is not to throw a thousand features into a phone just for a talking point. Make sure the features you introduce actually work well, if not the best in class. Less is more.
Oh yeah. Get a proper hardware designer.
You've hit the nail on the head here. Jobs said in the mid-90's:
"If I were running Apple, I would milk the Macintosh for all it's worth ? and get busy on the next great thing. The PC wars are over. Done. Microsoft won a long time ago."
Now, I appreciate Macintosh has in fact made a remarkable comeback, but this mindset is what's keeping Apple at the top. It doesn't matter what you've done or what you are doing, what matters is what you are going to do.
They certainly do. Between Android's feature dominance...
Only in your Apple hating wet dreams. All of your previous posts prove the point.
I'm also confused as to why so it's fashionable, especially in the US, to hate on Nokia. I agree that they've got a lot of problems but I don't understand the hatred and vitriol. Did they sleep with your mother? It's Iceland, not Finland, that's the naughty Nordic country at the moment.
From what I've seen of Symbian^3, the UI is behind the iPhone but catching up. It's certainly a big improvement over S60 5th edition. The most important change is the development tools though. No longer will application developers have to learn the quirks of Symbian C++ as Symbian^3 uses the thoroughly modern (and multi-platform) Qt framework. I can't wait to try it, personally.
EDIT: Looking at Nokia's smartphone sales, they increased to 21.5mil from 20.1mil Q4 2009 (+3%) and 13.7mil Q1 2009 (+57%). I know the price dropped but doing better in Q1 than Q4 is impressive.
Nokia's biggest issue (and the biggest change in paradigm, which yes, was ushered in by Apple) was that phones aren't about HW anymore. They are all about the SW. And I dont think Nokia has the SW capability to compete in this new generation.
They really need to buy Palm, before more of their engineers jump that sinking ship.