Nokia sales show recovery

Analysts still believe year-end result to have weakened

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The decline in sales of mobile telephones, which had been going on for a year, appears to have ended, according to the market research company Strategy Analytics.
      According to early figures put out by the company, worldwide sales of mobile handsets totalled 308 million in the fourth quarter of 2009, which is five per cent more than in October-December of 2008.
      Sales of the Finnish manufacturer Nokia are believed to have increased by four per cent to 118 million handsets. In spite of the promising figures, the growth for Nokia was slower than that of the market in general.
      Consequently, Strategy Analytics calculates that Nokia’s market share at the end of the year dipped to 38 per cent. In late 2008 Strategy Analytics calculated Nokia’s market share as 39 per cent.
     
Nokia is scheduled to publish its Q4 result on Thursday.
      Analyst Neil Mawston of Strategy Analytics says that Nokia’s sales were boosted by the comprehensive selection of telephones, especially the 1200 and 1600 series, and the models of the N-series.
      According to the advance information, the biggest successes on the mobile phone market at the end of the year were the South Korean Samsung and the American Apple.
     
October-December last year was the first quarter in the year in which the number of handsets sold exceeded that of the corresponding period in the previous year.
      In normal cyclical variation, the last quarter of each year is usually the best for Nokia. At the end of 2008, however, the mobile telephone market collapsed as a result of the economic crisis.
     
During the autumn, Nokia has introduced several models with touch screens, and has upgraded its range of low-cost models. Last year growth in sales of smart phones, which are crucial for the company’s result, have not kept pace with market growth, and the proportion of cheaper models has increased in the company’s total sales.
      In spite of the increase in the number of handsets sold, investors are not expecting an improvement in Nokia’s result.
      A survey of 37 analysts by Reuters news agency indicated that Nokia’s October - December profit excluding single items was EUR one billion, which is more than 17 per cent less than a year earlier.
      Turnover is believed to have plummeted by 12 per cent to EUR 11.2 billion.
     
The forecasts suggest that Nokia’s profit is being hurt mostly by the performance of Nokia-Siemens Networks, whose business profits are calculated to have declined by more than 50 per cent to EUR 45 million.
      Profits at Nokia’s Devices and Services unit is believed to be at about the same level as a year ago, or at about EUR 1 billion. Because of a number of new devices, profitability for the unit can be weakened by high research and development costs.
     
The map company Navteq is expected to have grown by eight per cent to EUR 56 million.
      At the annual level, Nokia’s business profit for 2009 is expected to be less than half of that in 2008. The first half of 2008 was a time of powerful growth.


Previously in HS International Edition:
  Nokia to introduce free navigation services to boost smartphone sales (22.1.2010)
  Patent dispute heats up between Nokia and Apple (7.1.2010)
  Nokia to lay off 2,000 workers at Salo plant for up to three months in 2010 (14.12.2009)
  Nokia cutting back on telephone models and on employees in Finland (23.11.2009)
  Nokia still choked by recession; stock falls 11% in Helsinki and New York (16.10.2009)

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