updated 09:20 am EDT, Wed June 16, 2010
Nokia warns spring sales will be low
Nokia today lived up to predictions by warning that its spring quarter's results would be disappointing. The company expects its net sales to fall near or below the bottom of its $8.3 billion minimum target as the "competitive environment" in high-end phones has forced it to ship fewer phones. Gross profit margins have also been hurt as it has had to turn more attention to cheaper phones.
The forecast was significant enough that Nokia no longer believed its market revenue share would be flat, as it has said in its previous estimates. It still expects to draw even in sheer units but should lose relative value as Nokia slips in the high-end arena.
Nokia's statements directly point to continued long-term trouble for its smartphone business. The company kept flat market share in the winter but saw a rapid rise in Android and iPhone sales that may continue this spring through the launches of phones like the Droid Incredible, Evo 4G and iPhone 4. Without any significant new smartphones shipping this spring, Nokia won't have a chance to offer a more competitive offering until the N8 ships toward the end of the summer.