Nokia Q2 loses ground to Apple and others

Nokia on Thursday confirmed outlook warnings by posting disappointing results for the spring. The phone producer's operating profit plunged 31 percent compared to a year ago as its device mix skewed away from smartphones and towards basic phones. Although it increased its total phone shipments to 111 million, a combination of lower average prices and lower profit margins on phones was responsible for almost all of the roughly $168 million drop.

The firm also admitted that it was continuing to lose market share as its growth was below par. The eight percent increase in total phone share was below the estimated 12 percent average for the rest of the field, resulting in a slide from 35 percent share in spring 2009 to an estimated 33 percent today. It also shipped 24 million "converged" devices, up 41 percent from a year ago, but would trail many of its closest competitors in growth: RIM saw a 43 percent jump in BlackBerries as of its latest results, while Apple saw a 61 percent jump in iPhones. Google doesn't provide collective shipments for Android, but its platform's share is known to have grown dramatically with as many as 160,000 devices a day now being sold.

Nokia's smartphone share is believed to be lower as it includes netbooks and other non-phone devices in its converged device list, masking what are likely to be lower numbers after excluding the Booklet 3G.

Company chief Olli-Pekka Kallasvuo tried to remain optimistic and said that much of the growth was in "less mature markets" in the developing world, where Nokia still has sway. He pinned virtually all of the company's hopes on the yet to ship N8 as well as other Symbian^3 devices that he hoped would "kick-start Nokia's fightback" against the iPhone, Android and BlackBerry.

The statements nonetheless may be the CEO's last in his current role. Although he dismissed rumors as speculation, the company is now widely believed to be searching for Kallasvuo's replacement as it grows frustrated with his inability to reverse years of declines. Nokia had over half of the phone market, including in smartphones, when the iPhone first launched in June 2007 but has lost share in most quarters since as Apple, RIM and now Google have led customers away. The executive has also insisted more than once that he would improve Nokia's standing in the US, but its American share has only declined overall and is now virtually non-existent in smartphones.

By Electronista Staff