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Nokia warns of phone slump in spring even with WP7 switch

updated 09:20 am EDT, Tue May 31, 2011

Nokia lowers phone sales outlook for spring 2011

Nokia on Tuesday warned that its spring would be poorer than expected even in light of Windows Phone 7 plans. The company now expected its revenue from device sales to be "substantially below" its original goals, dropping from the equivalent of $9.5 billion down to $8.8 billion. The drop would come from a change in the "competitive dynamics" across the entire spread, including in China and Europe, and a further falling away from smartphones as sales both dropped outright and moved towards cheaper designs.

Profit margins could be break even where they would have been six to nine percent, Nokia said.

The sudden shortfall led the Finnish company to drop any yearly forecast for 2011. It planned "immediate action" but didn't say what this would be beyond its existing long-term plans and "intensifying" marketing at the stores themselves.

CEO Stephen Elop saw the slump as a recognition that the WP7 switch was tough and that company had to "accelerate the pace" in moving over. The company now said it had "increased confidence" in its plans to get its first Windows Phone in 2011.

The company is in a race to make the transition and had been expecting dropping interest in its Symbian line over the next several months. The new outlook suggested that interest may have been dropping off faster than anticipated as customers who hadn't been switching to Android, BlackBerry, or iPhone before were either waiting for WP7 or switching platforms outright. Nokia has been rapidly losing share and in some charts is already being passed by the collective Android platform.



By Electronista Staff
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Comments

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +10

    Even?

    "Nokia warns of phone slump in spring even with WP7 switch"

    ought to be:

    "Nokia warns of phone slump in spring especially with WP7 switch"

  1. kerryb

    Fresh-Faced Recruit

    Joined: Aug 2001

    +7

    an iron life preserver

    Android may have not been the best choice for Nokia but it may have been a better long term option than the failing WP7. I think the lump of cash Microsoft offered them was too much to resist and they like many in the past have done sold their company's soul to M$.

    No wonder Nokia is suing Apple they like everyone else were caught sleeping when the iPhone was realized and then tried ignoring it or calling it a fad and worst of all did not spend the last 3 years trying to make something better. This is how companies go extinct, they refuse to evolve.

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +7

    plans to take immediate action

    I'm sure he (Elop) plans to shoot the other foot as soon as possible.

  1. Jonathan-Tanya

    Fresh-Faced Recruit

    Joined: Oct 2004

    +3

    time to think about who is reading tech blogs

    there was an opinion, for a while, that only highly interested people were reading gadget blogs.

    Be that as it may - the news trickles down. The reality is, if the blogosphere warns against buying into a dying platform - the news gets out, and the people stop buying.

    The blogs are important. Even if only because they shape the opinions of the influence peddlers - one way or the other they are ultimately important.

    It is clear that Elop thought he would announce the death of Symbian to one group, while advertising it heavily, to another, and he thought that it would work.

    That - was not only a very public miscalculation, but he should have known better. This was a very avoidable mistake - he could have worked on a Windows phone without making a public announcement. Even if MS wanted the announcement - don't tell me there aren't ways to prepare, there clearly are ways to prepare - he flubbed this transition badly - and will continue to do so. It's not over yet - not the transition, and not the continued miscalculations.

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +5

    It takes years to develop an OS.

    Years and years. This is just year 1 for WP7, which is really not the 7th generation of anything. It's a 1.0 release.

    Microsoft just put the "7" in because their marketing group wanted to exploit whatever "Windows 7 halo" there was. And because nobody pays attention to any Microsoft OS unless it's at least at version 3.1.

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