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