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VIRTUALISATION Nokia market share and profits decline alarmingly
VIRTUALISATION Nokia market share and profits decline alarmingly | Nokia market share and profits decline alarmingly |
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| by Stan Beer | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Friday, 23 January 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
  
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Devices and services was also responsible for most of a massive 80.3% year on year decline in operating profit, which dropped from €2.492 billion in Q4 2007 to just €492 million in Q4 2008. The annual figures did not give much cause for cheer either, with sales of €50.71 billion in 2008 down 0.7% on the previous year and operating profit of €4.966 billion down 37.8% on 2007. Nokia's dismal set of numbers for the final quarter of 2008 add up to a marked decline in market share from 40% in Q4 2007 to 37% in 2008. The explanation given by the company for Nokia's poor final quarter largely hinged on the global economic downturn. Olli-Pekka Kallasvuo, Nokia CEO said: "In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact the mobile communications industry. We are taking action to reduce overall costs and to preserve our strong capital structure. "This is clearly our top priority in the current economic environment. However, it is important for Nokia to continue investing at the proper pace in future growth. We believe Nokia has a tremendous opportunity to capture value as the Internet services market evolves and grows. Being a catalyst for change has been our heritage and it will be our future." However, global downturns which hit all companies playing the same space don't necessarily always translate to declining market shares. Some market watchers have pointed to Nokia's inability to compete successfully with handset products in the high end of the market, where smartphones like Blackberry and iPhone play. Of note, however, is the marked sequential drop in iPhone sales in Q4 2008 from Q3 2008, indicating that Q4 was a disastrous quarter for high end discretionary purchases in the mobile handsets space overall.
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