21st Oct 11
Nokia beats forecasts by selling 107 million phones
by Paul Russell
Positive message: Nokia looking up due to satnav and dual sim phones
Positive message: Nokia looking up due to satnav and dual sim phones
The world’s largest phone manufacturer by volume, Nokia, have announced sales of 107 million handsets during the third quarter, beating forecasts and providing a temporary respite to one of the most dramatic declines in market share experienced at a technology company.
The Finnish group announced that operating losses had shrunk from €487m (£425m) during the second quarter to €71m, while details began to emerge of the first Nokia handsets running with one of Microsoft’s operating systems. The chief executive of Nokia, Stephen Elop, is hoping the partnership can help bring about a full recovery for his company.
Performance at the phones arm, which went from a 4.5 per cent operating loss to a 2.4 per cent gain, was helped by strong demand India and China for its dual-sim handsets, which can hold two sim cards in order to separate personal and business calls, or get cheaper roaming charges or better coverage from state to state.
Nokia shares closed at €4.73, up 5.5 per cent, despite an overall drop in revenues of three per cent to €9bn during the three months ending 30 September, largely due to losses at the Navteq satnav division as well as the Nokia Siemens Networks equipment joint venture.
Mr Elop said that from a product standpoint, the overall mobile phones portfolio achieved a strong performance. He added that they shipped roughly 18 million dual-sim devices in the third quarter, and in markets like India, were able to gain market share.
The company’s greater China revenues increased by 35 per cent to €1.3bn quarter on quarter, bringing them even closer to Europe, its biggest region, which dropped 16 per cent to €1.4bn. The manufacturer shipped almost 17 million smartphones and nearly 90 million normal phones.
Janardan Menon, an analyst at broker Liberum, said that given the strong results and the likelihood its new Windows-based devices will be launched next week at Nokia World, there is a positive outlook in terms of stock, at least over the short term.
With Apple taking much of its business at the top end and Google’s Android operating system squeezing its mid-market stronghold, Nokia has seen its global market share drop from 35 per cent at the start of last year to 25 per cent this summer, as well as from 33 per cent to 21 per cent in its European division.
Elop’s decision at the start of the year to scrap Nokia’s Symbian operating system to concentrate on Microsoft’s Windows Phone has meant it has been unable to compete for the majority of 2011 as it attempts to complete the transaction as quickly as possible. He confirmed that the first Windows handsets would go on sale in certain countries before Christmas, followed by a full rollout next year.
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