Nokia Handsets and Services Sales Going Pretty Bad
It seems that the rather poor economic period the world has been going through is affecting some of the biggest names in the mobile industry a lot more than they had initially anticipated. And while US customers are battling it out for an iPhone pre-order, Nokia's prospects for the future are pretty grim, with the sales estimates for 2010 dropping, due mostly to less interest from the customers and a much more savage market competition.
So, according to their own statement, Nokia now expects Devices & Services net sales to be at the lower end of, or slightly below, its previously expected range of EUR 6.7 billion to EUR 7.2 billion for the second quarter of 2010. This update is primarily due to lower than previously expected average selling prices and mobile device volumes. Furthermore, Nokia now expects the Devices & Services non-IFRS operating margin to be at the lower end of, or slightly below, its previously expected range of 9% to 12% for the second quarter 2010.
The rest of the year won't be particularly good for the Finnish mobile phone manufacturer either since it continues to expect industry mobile device volumes to be up approximately 10% in 2010, compared to 2009, but also its mobile device value market share to be slightly lower in 2010. This update is primarily due to competitiveness on the high-end market and shifts in product mix.
In other words, Nokia's finding it more and more difficult to keep up the pace with the other major players in this industry, such as HTC, Samsung, LG, RIM, Sony Ericsson and even Apple. Unfortunately, as far as we're concerned, this is nothing but their own fault, because the company didn't really manage to keep up with the innovations in this field, not to mention the diversification of market demand. If they had, they would have probably enjoyed a much better position than they do today.