updated 09:00 am EDT, Fri September 5, 2008
Nokia Lowers Share Outlook
Nokia today preemptively lowered its market share estimates for the summer quarter, warning that it expects to lose share compared to the spring. The company had previously predicted that its market share would remain largely flat but now claims that multiple concerns have forced it to change its view; the firm remains deliberately unspecific regarding which firms are taking that share but claims that its loss will come from its own "tactical decision" not to keep up with "aggressive pricing of some competitors," alluding to the heavily subsidized iPhone 3G launched during the same quarter.
The firm indirectly claims that Apple is making a grab for market share at the expense of its long-term welfare, suggesting that its own more cautious approach is more effective overall.
"Nokia's strategy is to take market share only when the company believes it to be sustainably profitable in the longer term," the company argues. "Nokia has not broadly participated in the recent aggressive pricing activity - as it believes that the negative impact to profitability would outweigh any short term incremental benefits to device unit sales."
The company also cites a tougher overall market and considers the entry-level market separate from its pricing concerns. An unnamed and likely unreleased mid-range cellphone has also taken longer to mass-produce than expected, Nokia says.
Finland-based Nokia has regularly maintained a definite lead as the largest cellphone manufacturer in the world with as much as 40 percent market share over multiple quarters but has largely gone uncontested in the media-oriented smartphone market until the launch of competing offerings from Apple and Research in Motion. Most of Nokia's Nseries phones have often been substantially more expensive and regularly go without carrier subsidies in North America, costing a minimum of $560 US for the unlocked N78 NAM and peaking at the $895 N96.
Nokia has also partly contradicted its claims of firm pricing in Canada, where the phone maker worked with Rogers to cut the N95 8GB's price in half to match that of the iPhone 3G. Apple's phone had launched just before the cut with nearly all of the same features.
Korean firms LG and Samsung are also known to be gaining in the market but have credited most of their success to sales of mid-range phones that have primarily taken share away from Motorola and Sony-Ericsson rather than smartphone manufacturers.