Worldwide cell phone sales fell in the first quarter of this year, but smartphones continued to grow, despite a deepening recession, according to a report published by Gartner Wednesday.
The news shouldn't come as a big shock. Cell phone manufacturers, such as Nokia, had reported disastrous earnings for the first quarter. But the growth in smartphone sales, which were up 12.7 percent compared to the first quarter of 2008, provides some hope for the industry.
Touchscreen devices seem to be leading the pack in terms of device growth, with Apple's iPhone 3G doubling its market share in the first quarter compared to the first quarter last year. Apple shipped 3.9 million iPhones for a market share of 10.8 percent.
In terms of the overall cell phone market, manufacturers sold about 269 million cell phones, which was about 14.5 percent fewer than were sold during the fourth quarter of 2008 and about 9.4 percent lower compared to the same quarter last year.
Nokia continued in the lead with about 36 percent of the market, a 3 percent dip from the same quarter last year. Samsung's sales grew and it is now the second largest cell phone maker with 19.1 percent of the market. This is up from 14.4 percent during the first quarter last year. LG, Motorola, and Sony Ericsson make up the rest of the top five cell phone makers.
While Apple saw the largest amount of growth on the smartphone side, Nokia managed to hold onto to its position as the world's largest manufacturer of smartphones. The company has 41.2 percent of the smartphone market. But its marketshare has been slipping. At the end of 2008, the company had 45.1 percent of the market. Aside from Apple, Research In Motion also had a big quarter. Its BlackBerry devices made up nearly 20 percent of all smartphone sales in the quarter.
The boost in smartphone sales is particularly good news for companies like Palm, which is banking on the success of upcoming Palm Pre. The phone, which goes on sale June 6, will initially be sold exclusively on Sprint's network. The device was announced in January at the Consumer Electronics Show in Las Vegas and has been hyped ever since. Sprint's CEO Dan Hesse said this week he expects shortages when the device goes on sale in a couple of weeks.
Even though smartphones sales continue to grow, they still only make up about 13.5 percent of total mobile devices sales. This figure is up from 11 percent a year ago, but it still represents a small portion of the overall cell phone market.
The fact that the smartphone market is growing at all during the current recession says a lot about the pent up demand for higher functioning devices. But hefty service fees could derail growth if the economy doesn't pick up or people lose their jobs.
However, there are signs the market is stabilizing. Mark McKechnie, an analyst with Broadpoint AmTech, published a research note earlier this week stating that early indications suggest that Nokia's sales could be up slightly up in terms of total units for the second quarter. Still, even though the market looks like it might be stabilizing, most analysts don't see a recovery until well into 2010. Until then companies will be crossing their fingers that consumers' love affair with smartphones continues.
taken from cnet.com
Wednesday, May 20, 2009
Nokia Announces Sales at Flagship Stores
Today Nokia announced that it will be holding sales at its U.S. flagship stores in Chicago and New York City on May 16 and 17. The sale includes a 20% discount on all accessories. In addition to accessory sales, Nokia is slashing prices of a number of devices. The E75 will cost $429, the 5800 XpressMusic will be available for under $300, the E63 will cost $225, and the E71 will cost $290. All these phones are sold unlocked. In addition, anyone who pre-orders the N97 on these days will receive a free Nokia Bluetooth Headset BH-804. The sales are limited to devices that are in stock, no rain checks will be given.
Nokia (NOK) Sales Crater, Handset Industries Shudders
It won’t be a nice day to go to work at Motorola (MOT), Samsung, or Sony Ericsson. Their larger competitor, Nokia (NOK) said it sold 19% fewer phones in the first quarter than it did in the same period a year ago. Total units shipped dropped to 93.2 million.
The company said first-quarter net income fell 82% to 122 million euros. Revenue collapsed 27% to 9.3 billion euros.
While companies like Motorola (MOT) will suffer because of the trend of falling handset sales across the globe that Nokia is signaling, the questions is whether it will spread to the smartphone businesses, particularly Apple (AAPL) and RIM (RIM). While Nokia’s line up of handsets is not weighted heavily with smartphones because it has 40% of the global mobile phone market, it is a reasonable proxy for both the high end and the low end of the industry.
There has been a great deal of concern about whether the iPhone, Blackberry, and new Palm (PALM) Pre can keep strong sales momentum through the year. Now, it looks like that may be a problem.
The company said first-quarter net income fell 82% to 122 million euros. Revenue collapsed 27% to 9.3 billion euros.
While companies like Motorola (MOT) will suffer because of the trend of falling handset sales across the globe that Nokia is signaling, the questions is whether it will spread to the smartphone businesses, particularly Apple (AAPL) and RIM (RIM). While Nokia’s line up of handsets is not weighted heavily with smartphones because it has 40% of the global mobile phone market, it is a reasonable proxy for both the high end and the low end of the industry.
There has been a great deal of concern about whether the iPhone, Blackberry, and new Palm (PALM) Pre can keep strong sales momentum through the year. Now, it looks like that may be a problem.
Thursday, May 14, 2009
Nokia Says App Sales Jump By 70 Percent With Carrier Billing
About two weeks ago, there was a brouhaha over whether Nokia (NYSE: NOK) was actually going to support carrier billing when it launches the Ovi Store this month. Turned out that carrier billing was going to be supported in eight countries, just not at first in the U.S.
At EconSM today, Nokia’s VP of product management, George Linardos, illustrated just how important operator billing is….“When we start locally with credit card billing and then we move to operator billing, we see a 70 percent lift in sales literally over night.” Of course, that doesn’t exactly translate to 70 percent more revenues since you are giving a cut to the operator, too. “That means there’s a cut taken out,” he said.
As for whether a relationship with Verizon Wireless (NYSE: VZ) will be hammered out soon? Verizon Wireless’s Jennifer Byrne, director of Digital Media and Business Development, who was also on the panel, wouldn’t say. Bryne: “I can’t comment on any ongoing discussions, but I think the connections to multiple storefronts and multiple billing options is something we are working on.”
As for when Ovi Store will launch, Linardos was vague. “Very, very soon.”
At EconSM today, Nokia’s VP of product management, George Linardos, illustrated just how important operator billing is….“When we start locally with credit card billing and then we move to operator billing, we see a 70 percent lift in sales literally over night.” Of course, that doesn’t exactly translate to 70 percent more revenues since you are giving a cut to the operator, too. “That means there’s a cut taken out,” he said.
As for whether a relationship with Verizon Wireless (NYSE: VZ) will be hammered out soon? Verizon Wireless’s Jennifer Byrne, director of Digital Media and Business Development, who was also on the panel, wouldn’t say. Bryne: “I can’t comment on any ongoing discussions, but I think the connections to multiple storefronts and multiple billing options is something we are working on.”
As for when Ovi Store will launch, Linardos was vague. “Very, very soon.”
Monday, April 20, 2009
Nokia Q1 2009 Net Sales EUR 9.3 Billion, Non-IFRS EPS EUR 0.10 (Reported EPS EUR...
Nokia Q1 2009 Net Sales EUR 9.3 Billion, Non-IFRS EPS EUR 0.10 (Reported EPS
EUR 0.03)
Non-IFRS and Reported Gross Margin in Devices & Services 33.8%, Unchanged From
Q4 2008
ESPOO, Finland, April 16 /PRNewswire-FirstCall/ --
Nokia Corporation (NYSE: NOK)
Interim Report
April 16, 2009 at 13.00 (CET +1)
The complete press release with tables is available at:
http://www.nokia.com/results/Nokia_results2009Q1e.pdf
EUR 0.03)
Non-IFRS and Reported Gross Margin in Devices & Services 33.8%, Unchanged From
Q4 2008
ESPOO, Finland, April 16 /PRNewswire-FirstCall/ --
Nokia Corporation (NYSE: NOK)
Interim Report
April 16, 2009 at 13.00 (CET +1)
The complete press release with tables is available at:
http://www.nokia.com/results/Nokia_results2009Q1e.pdf
Sunday, April 19, 2009
Nokia's first-quarter earnings match expectations
This morning, Nokia (NYSE: NOK) announced that first-quarter net profit plunged 82% to 122 million euros, which works out to 0.03 euro per share. Taking one-time items out of the picture, the mobile phone firm tallied adjusted earnings of 0.10 euro per share. While the results were far worse than a year ago, Nokia matched the consensus estimate for earnings of 0.10 euro per share.
The company wasn't as fortunate as far as sales are concerned. The European mobile phone manufacturer saw quarterly sales drop to 9.3 billion euros, 27% worse than a year ago. Not only were sales worse than a year ago, but they also fell short of the consensus estimate for sales of 9.7 billion euros. Nokia reported that it shipped 93.2 million new phones during the quarter, which was 19% less than a year ago and 18% lower than the previous quarter.
Nokia's market share was 37%, unchanged from the fourth quarter. The company expects device volume to be flat to slightly higher in the second quarter and also believes its market share will increase. Nokia also believes that the telecoms-equipment market will decline 10% this year, which is wider than the 5% decline the company originally forecast.
The stock is in the midst of an intermediate-term rally, which has it on the verge of a break through resistance at the equity's 20-week moving average. Nevertheless, Nokia still faces overhead resistance from its 10-month moving average. The good news is that this trendline is currently in the $17 region, which gives the shares some room to run before they would hit the potential resistance. That said, a negative reaction to this earnings announcement could force the stock lower, bringing the rally to an end in the process.
The company wasn't as fortunate as far as sales are concerned. The European mobile phone manufacturer saw quarterly sales drop to 9.3 billion euros, 27% worse than a year ago. Not only were sales worse than a year ago, but they also fell short of the consensus estimate for sales of 9.7 billion euros. Nokia reported that it shipped 93.2 million new phones during the quarter, which was 19% less than a year ago and 18% lower than the previous quarter.
Nokia's market share was 37%, unchanged from the fourth quarter. The company expects device volume to be flat to slightly higher in the second quarter and also believes its market share will increase. Nokia also believes that the telecoms-equipment market will decline 10% this year, which is wider than the 5% decline the company originally forecast.
The stock is in the midst of an intermediate-term rally, which has it on the verge of a break through resistance at the equity's 20-week moving average. Nevertheless, Nokia still faces overhead resistance from its 10-month moving average. The good news is that this trendline is currently in the $17 region, which gives the shares some room to run before they would hit the potential resistance. That said, a negative reaction to this earnings announcement could force the stock lower, bringing the rally to an end in the process.
Nokia's Earnings Fall 90%
Nokia's earnings have dropped 90% from the same period last year. Their Symbian handsets keep losing ground against more modern competition in the smartphone market.
Friday, April 17, 2009
Tuesday, March 17, 2009
Nokia Plans to Slash 1,700 Jobs Amid Sluggish Sales of Cellphones
Nokia, the world’s largest maker of mobile phones, said Tuesday that it planned to eliminate 1,700 jobs, roughly 3 percent of its work force, as demand for phones continued to sag.
Times Topics: Nokia OyjThe company, which is based in Espoo, Finland, said 700 workers would be laid off in Finland and the rest elsewhere in Europe, Asia and North America. The layoffs are to take place in Nokia’s devices and markets divisions, which produce, market and sell mobile phones, and in a unit responsible for long-term corporate strategy.
The job cuts, the biggest at Nokia since the economic downturn began last year, are part of the company’s plan to trim its annual operating expenses by 700 million euros ($907 million), by the end of 2010. That would be about 11 percent of the total expenses.
Nokia announced the austerity measures on Jan. 22 as the company revealed plans to freeze salaries, hiring and nonessential travel and to offer severance packages to as many as 1,000 employees.
In another cost-cutting move, the company stopped designing phones for the Japanese market.
Times Topics: Nokia OyjThe company, which is based in Espoo, Finland, said 700 workers would be laid off in Finland and the rest elsewhere in Europe, Asia and North America. The layoffs are to take place in Nokia’s devices and markets divisions, which produce, market and sell mobile phones, and in a unit responsible for long-term corporate strategy.
The job cuts, the biggest at Nokia since the economic downturn began last year, are part of the company’s plan to trim its annual operating expenses by 700 million euros ($907 million), by the end of 2010. That would be about 11 percent of the total expenses.
Nokia announced the austerity measures on Jan. 22 as the company revealed plans to freeze salaries, hiring and nonessential travel and to offer severance packages to as many as 1,000 employees.
In another cost-cutting move, the company stopped designing phones for the Japanese market.
Thursday, January 22, 2009
Nokia Sees 10% Drop in 2009 Mobile Phone Sales
Following in the footsteps of LG and Sony Ericsson, Nokia today reported a poor performance for the fourth quarter of 2008, for which it blamed the global economic downturn. Handset sales during the latest three-month period were 113.1 million, down 15.3 percent from the fourth quarter of 2007 and 4 percent lower than third-quarter 2008 sales of 117.8 million units. Nokia also lost 1 percent market share during the quarter. And not only did they sell fewer phones, they sold them cheaply; Nokia’s average selling price for a handset declined to 71 euros from 83 euros.
But forget all that, for the worst is yet to come. Nokia is forecasting a 10 percent decline in global handset sales — not just for the company but for the entire industry. This is not a good sign for anyone making a living by selling to the mobile industry, especially chipmakers like Texas Instruments.
Nokia had previously forecast a 5 percent decline in sales, so things are clearly a lot worse than anyone thought. Sales are going to be swimming with the fishes for the first half of the year, Nokia indicates, though things might get marginally better in the second half of 2009.
But forget all that, for the worst is yet to come. Nokia is forecasting a 10 percent decline in global handset sales — not just for the company but for the entire industry. This is not a good sign for anyone making a living by selling to the mobile industry, especially chipmakers like Texas Instruments.
Nokia had previously forecast a 5 percent decline in sales, so things are clearly a lot worse than anyone thought. Sales are going to be swimming with the fishes for the first half of the year, Nokia indicates, though things might get marginally better in the second half of 2009.
Nokia's Sales and Profits Plummet
Nokia (NOK) startled analysts and investors on Jan. 22 when it reported a slump in sales and earnings that exceeded even pessimistic forecasts and that bode ill for other manufacturers of consumer technology. The Finnish handset maker, whose products are the world's most widely used brand of consumer electronics, said that fourth-quarter sales dropped 19% from a year earlier, to $16.5 billion, while operating profit plunged 80%, to $639 million.
Nokia sales declined at both the high and low ends of the market. In China, which has been the company's largest market, Nokia sold 36% fewer devices in the quarter vs. a year earlier as local dealers cleared out excess inventory. Nokia has so far refused to be drawn into a price war in developing countries, a strategy that hit sales and helped push the company's worldwide market share down to 37% from 38% the previous quarter.
Meanwhile, sales of high-end handsets—those with features such as e-mail or Internet browsing—fell to 15.1 million in the fourth quarter of 2008 vs. 18.8 million a year earlier, even as the total market for such devices soared. Nokia lost market share to the Apple (AAPL) iPhone and new consumer-oriented handsets from BlackBerry maker Research In Motion (RIMM). "Nokia is now having to cope with a double whammy of market slowdowns in both developed and developing markets," said Neil Mawston, analyst at market watcher Strategy Analytics. The company's operating profit margin on handsets is at its lowest point in 10 years, he said.
Disappointed CEO
Nokia Chief Executive Officer Olli-Pekka Kallasvuo said he was disappointed by the results, which pushed company shares down 5% in Helsinki trading. But he held out the possibility of a recovery later in 2009 as dealers clear out excess inventory. "The markets that have been hit hardest are the markets that are our strongholds," Kallasvuo told BusinessWeek. "The underlying need in emerging markets continues to be there."
Nokia's quarterly earnings report, closely watched for what it says about technology demand, will feed expectations that the handset industry is in for one of its roughest years ever. Nokia forecast that sales by all handset makers will fall 10% this year compared with 2008—double what the company previously predicted—but with a steeper decline in the first half of the year than the second. "The [sales] channel is destocking. We believe that well before the end of the first half, this destocking will run its course and underlying consumer demand will come into play," Kallasvuo said.
The decline could hit other handset makers more severely. Sony Ericsson Mobile Communications, the handset joint venture between Sweden's Ericsson (ERIC) and Japan's Sony (SNE), earlier reported a $243 million loss for the fourth quarter. Ericsson CEO Carl-Henric Svanberg told BusinessWeek on Jan. 21 that "the rationale for the joint venture is still there."
Market Shakeout
Still, analysts expect the abysmal economic climate to drive some weaker manufacturers from the market, which could ultimately benefit Nokia. The company's huge market share allows it to manufacture at a lower cost per unit; it has a wider range of products than any competitor; and its distribution network is regarded as one of the best in the world. "Nokia is best placed to deal with the current market conditions," says Carolina Milanesi, research director, mobile devices, at market watcher Gartner (IT).
Until the handset market revives, though, Nokia will be forced to cut costs drastically—a painful move for a company used to growth. The company plans to reduce annual costs in its devices and services operations by more than $900 million by the end of 2010, with most of the cuts this year. Job reductions are inevitable, Kallasvuo said, though he wouldn't specify how many Nokia workers will be affected.
He also vowed to win back share in the crucial market for high-end devices with new products such as the 5800 Xpress Music, which features an iPhone-like touchscreen but sells for a lower price. The handset, launched late last year, has been selling well, according to Nokia. In coming months, Nokia will also launch the top-of-the-line N97, which features a touchscreen as well as a slide-out miniature keyboard for writing e-mail. "The empire is striking back," Kallasvuo said.
taken from Businessweek.com
Nokia sales declined at both the high and low ends of the market. In China, which has been the company's largest market, Nokia sold 36% fewer devices in the quarter vs. a year earlier as local dealers cleared out excess inventory. Nokia has so far refused to be drawn into a price war in developing countries, a strategy that hit sales and helped push the company's worldwide market share down to 37% from 38% the previous quarter.
Meanwhile, sales of high-end handsets—those with features such as e-mail or Internet browsing—fell to 15.1 million in the fourth quarter of 2008 vs. 18.8 million a year earlier, even as the total market for such devices soared. Nokia lost market share to the Apple (AAPL) iPhone and new consumer-oriented handsets from BlackBerry maker Research In Motion (RIMM). "Nokia is now having to cope with a double whammy of market slowdowns in both developed and developing markets," said Neil Mawston, analyst at market watcher Strategy Analytics. The company's operating profit margin on handsets is at its lowest point in 10 years, he said.
Disappointed CEO
Nokia Chief Executive Officer Olli-Pekka Kallasvuo said he was disappointed by the results, which pushed company shares down 5% in Helsinki trading. But he held out the possibility of a recovery later in 2009 as dealers clear out excess inventory. "The markets that have been hit hardest are the markets that are our strongholds," Kallasvuo told BusinessWeek. "The underlying need in emerging markets continues to be there."
Nokia's quarterly earnings report, closely watched for what it says about technology demand, will feed expectations that the handset industry is in for one of its roughest years ever. Nokia forecast that sales by all handset makers will fall 10% this year compared with 2008—double what the company previously predicted—but with a steeper decline in the first half of the year than the second. "The [sales] channel is destocking. We believe that well before the end of the first half, this destocking will run its course and underlying consumer demand will come into play," Kallasvuo said.
The decline could hit other handset makers more severely. Sony Ericsson Mobile Communications, the handset joint venture between Sweden's Ericsson (ERIC) and Japan's Sony (SNE), earlier reported a $243 million loss for the fourth quarter. Ericsson CEO Carl-Henric Svanberg told BusinessWeek on Jan. 21 that "the rationale for the joint venture is still there."
Market Shakeout
Still, analysts expect the abysmal economic climate to drive some weaker manufacturers from the market, which could ultimately benefit Nokia. The company's huge market share allows it to manufacture at a lower cost per unit; it has a wider range of products than any competitor; and its distribution network is regarded as one of the best in the world. "Nokia is best placed to deal with the current market conditions," says Carolina Milanesi, research director, mobile devices, at market watcher Gartner (IT).
Until the handset market revives, though, Nokia will be forced to cut costs drastically—a painful move for a company used to growth. The company plans to reduce annual costs in its devices and services operations by more than $900 million by the end of 2010, with most of the cuts this year. Job reductions are inevitable, Kallasvuo said, though he wouldn't specify how many Nokia workers will be affected.
He also vowed to win back share in the crucial market for high-end devices with new products such as the 5800 Xpress Music, which features an iPhone-like touchscreen but sells for a lower price. The handset, launched late last year, has been selling well, according to Nokia. In coming months, Nokia will also launch the top-of-the-line N97, which features a touchscreen as well as a slide-out miniature keyboard for writing e-mail. "The empire is striking back," Kallasvuo said.
taken from Businessweek.com
Monday, January 19, 2009
Nokia Tumbles Pre-Earnings; Estimates Falling
Nokia (NOK) shares are sagging badly ahead of the company’s fourth quarter earnings report due Thursday morning.
Credit Suisse analyst Kulbinder Garcha this morning cut his 2009 handset industry sell-in forecast to down 10%, from down 6% previously. Citing expectations of continued inventory reductions in the industry, he cut his 2009 EPS estimate to 74 Euro cents, from 87 cents. For Q4, he now sees the industry selling 319 million unis, flat sequentially, but up 10% year over year. He expects Nokia’s unit sales in the quarter to be 115 million units, down 2% sequentially and down 14% year over year. For the quarter, he sees Nokia posting revenue of 12.9 billion Euros and profits of 25 Euro cents a share, below the Street at 13 billion and 27 Euro cents. Garcha also cut his estimates on Ericsson (ERIC), citing his reduced handset forecast.
RBC Capital’s Mark Sue wrote this morning that he expects “generally subdued results” for the fourth quarter, and contends the company could cut its dividend in half as a cost savings measure. Sue thinks Q4 revenue could be “modestly” below the consensus, and says ASPs could be modestly below the previous quarter level of 72 Euros.
Morgan Keegan’s Tavis Mccourt this morning wrote that a survey of mobile handset pricing found that the average price for a smartphone has fallen about 5% over the last week, driven by discounts in particular at Sprint (S) and Verizon Wireless (VZ, VOD). He also said that overall handset units in 2009 are likely to be closer to down 10% than the down 5% estimate Nokia previously provided.
NOK today is down $1.04, or 7.4%, to $12.97.
Ericsson shares are down 61 cents, or 8.4%, to $6.62.
Credit Suisse analyst Kulbinder Garcha this morning cut his 2009 handset industry sell-in forecast to down 10%, from down 6% previously. Citing expectations of continued inventory reductions in the industry, he cut his 2009 EPS estimate to 74 Euro cents, from 87 cents. For Q4, he now sees the industry selling 319 million unis, flat sequentially, but up 10% year over year. He expects Nokia’s unit sales in the quarter to be 115 million units, down 2% sequentially and down 14% year over year. For the quarter, he sees Nokia posting revenue of 12.9 billion Euros and profits of 25 Euro cents a share, below the Street at 13 billion and 27 Euro cents. Garcha also cut his estimates on Ericsson (ERIC), citing his reduced handset forecast.
RBC Capital’s Mark Sue wrote this morning that he expects “generally subdued results” for the fourth quarter, and contends the company could cut its dividend in half as a cost savings measure. Sue thinks Q4 revenue could be “modestly” below the consensus, and says ASPs could be modestly below the previous quarter level of 72 Euros.
Morgan Keegan’s Tavis Mccourt this morning wrote that a survey of mobile handset pricing found that the average price for a smartphone has fallen about 5% over the last week, driven by discounts in particular at Sprint (S) and Verizon Wireless (VZ, VOD). He also said that overall handset units in 2009 are likely to be closer to down 10% than the down 5% estimate Nokia previously provided.
NOK today is down $1.04, or 7.4%, to $12.97.
Ericsson shares are down 61 cents, or 8.4%, to $6.62.