James Delahunty
16 Jul 2009 19:04
Nokia, the world's largest mobile-handset marker, posted a second-quarter earnings drop of 66 percent compared with the same period of the previous year. Net profit fell from €1.1 billion last year to €380 million, while total sales were at euro;9.91 billion, a drop of around 25 percent. The slump in profits was generally expected by analysts but the more disappointing news of the day was Nokia's adjustment of its target market share this year.
While previously expected to gain ground in the market, Nokia now expects its share of the mobile market to stay unchanged from 2008. The news sent share prices down 11 percent to €9.86. It's Nokia Siemens Networks joint-venture also had its outlook downgraded with the company now expecting a moderate loss of market share having previously aimed to maintain its current share.
The Finnish giant managed to ship 103 million mobile devices during the quarter, which represents a 15 percent drop. The global recession has had a huge impact on the market, and the average selling price of a Nokia handset fell from €74 to €62. "The mobile industry is undergoing its biggest change in its 20-year history," Nokia CEO Olli-Pekka Kallasvuo said in a conference call.
Global shipments of handsets fell to 245 million units in the first quarter, representing a 13 percent drop. Nokia has weathered the global financial crisis better than many of its competitors, but it has still been forced to axe thousands of jobs.