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Nokia shrinks to 31% share in fall; needs to 'change faster'

updated 07:35 am EST, Thu January 27, 2011

Nokia phone share down to 31pc in fall 2010

Nokia on Thursday reported fall results that underscored a rapidly falling influence in the market. The company kept its lead and shipped 123.7 million phones in the last quarter of 2010, but the shipments represented a three percent drop where some rivals have been growing. It dropped from 35 percent market share a year ago to an estimated 31 percent this year as it expected the rest of the industry had grown by 12 percent.

Smartphone performance was worse, Mokia said. Although it shipped 36 percent more, 28.3 million, the rest of the industry grew 73 percent and left it behind. The company's market share not only dropped sharply from a year ago, from 40 percent to 31 percent, but was also a steep plunge from 38 percent in the summer. In comparison, Apple's iPhone shipments were up 86 percent.

Nokia wouldn't name companies creating the effect but acknowledged that there was an "intense competitive environment" that was squeezing it out of the high-end phone market, effectively blaming both Android and the iPhone. Average selling prices reflected the shift. Although the average selling price of a basic feature phone was up slightly to $59, the selling price of one of Nokia's smartphones dropped the equivalent of about $40 to $214. The pricing indicated that most buyers were avoiding high-end phones like the N8 and skewing towards devices like the C3, which has been one of its relative runaway successes.

The company's CEO Stephen Elop portrayed a sense of urgency for the company, whose operating profit dropped more than a quarter over the past year to $1.5 billion as a result of its performance. Despite continuing to be profitable, Nokia's ability to compete is no longer the same and has moved on. "In short, the industry changed, and now it's time for Nokia to change faster," he said.

Expectations for 2011 share weren't given out and might not be made public until a February 11 strategy briefing. Nokia is known to have put much of the blame for recent share losses on the slow progress of Symbian and has both retaken the control of the OS and hedged its bets with plans for MeeGo, the new OS it custom-developed with Intel. It may still face trouble competing with others as it might have already dropped its first MeeGo phone, the N9, in favor of a MeeGo tablet that could face stiff opposition from Apple, Google and RIM.



By Electronista Staff
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Comments

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +2

    Aptly Named Company

    They sure are no Kia.

  1. iphonerulez

    Dedicated MacNNer

    Joined: Nov 2008

    +1

    It would be nearly impossible for a company of

    that size to change course within a year or so. The competition is already too great in the smartphone market because of the superior ecosystems of the rivals. Nokia built basically stand-alone feature phones and it doesn't seem as any of them were connected in any way. Nokia has so many models to contend with and they'd have to start trimming their inventory away. It was claimed that when they had their store, consumers would be bewildered by the number of various types of Nokia models on display. No doubt it was a good thing at one time, but no longer. Nokia needs to focus on a few models only. I don't know much about selling products in India and Africa, so maybe those countries demand lots of choices of models. It just seems that Nokia is full of bloat and needs to streamline its operations.

    Nokia should have been making changes before the iPhone came along and they just didn't see the changes coming. Most of the smartphone and feature-phone industry didn't. The iPhone caught the cellphone industry flat-footed. One good thing, though. Nokia's loss in market share might be able to be grabbed by the iPhone as consumers continue to move to smartphones as an everyday device. Nokia doesn't even have a corporate presence or strategy which really sinks it.

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    -1

    127 million phones, is that all?

    They can only sell, what 500 million phones a year, at that rate.

    What a bunch of losers.

    Look, I get it, Nokia is bad, I have a Nokia Nuron, nobody needs to tell me how bad they are...but they have 2 things going for them - huge customer base. A reputation for quality (in some countries, speaking of build quality, not OS)

    And - they are still the number one player in smart phones, even if dropping fast.

    Yes, they need to get a high end - quality - smartphone experience out, and fast. But if Blackberry can do it (with the soon to be released playbook) - then maybe Nokia will eventually do this, with Intel's help.

    I think Nokia will be a player, and between Microsoft, Blackberry, HP/Palm, and Nokia - I don't know which will shake out - Nokia just might survive it.

    But the Market will coalesce and have fewer OS choices. Certainly Android and Apple are safe - my guess is Blackberry and Palm/HP will fall out of the game first.

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    -1

    So When Will It Be Released?

    I think Nokia will be a player, and between Microsoft, Blackberry, HP/Palm, and Nokia - I don't know which will shake out - Nokia just might survive it.

    Let me know the minute I can download the Nokia player.

  1. wrenchy

    Forum Regular

    Joined: Nov 2009

    -2

    Want to boost your marketshare??


    Come to the Android Camp!
    All those bad feelings you had about us will be forgiven. Yes, we promise.

    Join us!

    Muhahahahahaaa.





    Drrrrroid!

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