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Nokia lowers outlook due to Android, iPhone

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.




by MacNN Staff

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Comments

  1. iphonerulez

    Joined: Dec 1969

    +2

    So goes the theory of high market share

    bringing monetary rewards. That's why I really don't see why booming Android growth is bringing such glee to analysts that it is stealing iPhone market share. But to what end? Exactly which companies are profiting from this tremendous growth? Not Google, not Motorola, not Sony-Ericcson. Maybe HTC, LG and Samsung whose sales are up.

    Nokia's share price has definitely taken a huge hit today and all that grand market share overhead is like an anchor tied to the fishhead's neck.

  1. legacyb4

    Joined: Dec 1969

    +2

    "Forced to ship fewer phones"?

    How about toeing the line and coming up with better products?

    Total cop out...

  1. SockRolid

    Joined: Dec 1969

    +1

    Pushed off the shelf

    Google's Android tactic is like that of the soft drink companies. For example, Coke has created many line extensions (Coke Zero, Diet Coke, Cherry Coke) and sub-brands (A&W, Dr. Pepper, Sprite) so they can fill up shelf space at the supermarket. To occupy more space and push their competitors' brands off the shelf.

    Google has multiple Android hardware partners and multiple versions of the OS out there, at different price points (some with 2-for-1 fire sale pricing). They're flooding the market with their free OS to grab market share, and they are figuratively pushing Nokia and other competitors off the "shelf". Especially those competitors who are falling behind the innovation curve.

    Nokia is still making billions every quarter. They're still crushing the low-end and feature-phone markets. But the high-margin smartphone market is slipping out of their reach.

  1. facebook_Moigradeanu

    Via Facebook

    Joined: Jun 2010

    -1

    comment title

    your comment

  1. facebook_Moigradeanu

    Via Facebook

    Joined: Jun 2010

    -1

    Nokia is bad this times !

    I am a nokia fan and i always loved theyr phones and smartphones but lalely thay dong give a c*** about what theyr customers want !
    I have the xpressmusic 5800 NAM witch i like allot but noking wont release the latest firmware update here in north america !
    All the damn planet has the v50 firmware and not us !
    Unless they stop pulling this king of bullcrap they will forever slip into the oblivion !
    c*** hardware with c*** software !
    The n97 selling for 500$ here in Canada with a 435mhz cpu and no 3d graphics !!!
    Its a damn 5800 with keyboard and better camera and they ask about the same as an iphone witch is years ahead in user experience, harware and software !

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