Wednesday, July 27, 2011

Nokia market share falls below 30%

Nokia reported better than expected first quarter profits despite confirming that its market share around the world dropped below 30% for the first time in over a decade, as the world's top mobile phone maker continued to lose ground to its rivals.

Though the Finnish company said its net profit for the quarter fell 5 million euro (£4.4 million) to 344 million euro (£294.4 million), the markets were impressed by news that operating profit only fell 14% during the period instead of the anticipated 40% decline.

Nokia shares were up 3% at 6.11 euro (£5.38) in afternoon trading in Helsinki.

Elsewhere in its statement, Nokia revealed that its revenues grew by 9% to 10.40 billion euro (£9.16 billion) from 9.52 billion euro (£8.39 billion) in the same period in 2010, while smartphone sales were up 6% at 7 billion euro (£6.17 billion).

Despite the increase in smartphone sales, Nokia confirmed that its overall global market share plunged to 29%, from 33% a year earlier and 31% in the previous quarter.

CEO Stephen Elop said Nokia has now signed a "definitive" deal with Microsoft to develop software for smartphones "and that product design and engineering work was "well under way."

But he cautioned that the company faced "a more challenging second quarter."

Nokia said the tsunami and earthquake in Japan had disrupted the supply of some components linked to Japanese suppliers and would impact its results in the second quarter.

Nokia is the world's top cellphone maker but faces stiff competition in top-end smartphones from Apple's iPhone, Android-based handsets and Research in Motion's Blackberry.

However, Nokia said it sold 24 million smartphones, 13% more than in 2010. Total handset sales were only slightly up at 108.5 million

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