Smartphone competition hurting Nokia

Stuart Corner
Monday, 21 June 2010 09:14

IT Industry - Market

Nokia Devices and Services has revised its guidance downwards, for the second time this year, in the face of intensifying competition at the high end of the market.

Nokia said that, during the second quarter of 2010, "multiple factors are negatively impacting Nokia's business to a greater extent than previously expected. These factors include: the competitive environment, particularly at the high-end of the market, and shifts in product mix towards somewhat lower gross margin products. In addition, the recent depreciation of the Euro affects Nokia's cost of goods sold, operating expenses and global pricing tactics."

Nokia now expects Devices & Services' net sales to be at the lower end of, or slightly below, its previously expected range of EUR6.7 billion to EUR7.2 billion for the second quarter 2010, primarily due to lower than previously expected average selling prices and mobile device volumes.

It expects industry mobile device volumes to be up approximately 10 percent in 2010, compared to 2009 and its share of the market volume to remain largely unchanged. However it expects is share by value to be slightly down, "primarily due to the competitive situation at the high-end of the market and shifts in product mix." Nokia's previous guidance was for a slightly increased market share by value.

Gartner VP and distinguished analyst, Nick Jones, in a blog posting interpreted Nokia's statement to mean: "that the Symbian user experience won't be fixed this year, and MeeGo won't arrive in time to make a difference in 2010 either."


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