Declining phone sales drive down Nokia net income in Q2

While the phone manufacturer now sees recovery in Q3, it no longer expects its market share to grow this year

Nokia reported second-quarter sales 25 percent lower than a year earlier, and net income down 66 percent. While it predicts that sales will stop dropping in the third quarter, it now expects to see no increase in its market share this year.

Second-quarter sales totalled EUR9.91 billion (US$13.9 billion as of June 30, the last day of the period reported), down from EUR13.15 billion a year earlier. Net income came in at EUR380 million, down from EUR1.1 billion, Nokia said Thursday.

Sales of mobile phones, which accounted for EUR6.59 billion of Nokia's revenue, declined 27.5 percent, slightly faster than sales of network infrastructure, which fell 21.3 percent to EUR3.2 billion.

Nokia's phone revenues are declining faster than shipments as the average selling price falls -- and this despite a move towards higher-end models.

Phone shipments for the quarter fell 15.4 percent year-on-year to 103.2 million units. Smartphone shipments increased 10.5 percent, to 41 million units.

Compared to last quarter, Nokia said, its share of the mobile phone market increased slightly, to 41 percent in the smartphone segment and 38 percent overall. In the first quarter it estimated its shares at 39 percent and 37 percent, respectively. But those shares are still the same or lower than a year earlier, when the company estimated its share of the smartphone segment at 41 percent and the overall phone market at 40 percent.

For the full year, it expects its market share to remain the same as in 2008: it had previously forecast an increase in market share.

The company's shipments were hardest hit in Latin America (down 41.8 percent) and North America (down 28.9 percent), while sales picked up 5.7 percent in Greater China, where the company sold 18.6 million phones.

Nokia predicted that global mobile phone shipments will remain stable or increase slightly in the third quarter, although it doesn't expect its share of the market to change. It expects shipments for 2009 to be around 10 percent lower than in 2008.

Navteq, the digital mapping provider that Nokia acquired last July, had an operating loss of EUR100 million on revenue of EUR147 million for the second quarter, a slight improvement on its performance in the first quarter. Because Nokia bought the company during the year, it did not provide a year-on-year comparison -- and made no projections for how the business will evolve in future.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags mobile phonesNokiasmartphones

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?