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.