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"Dark days" for Nokia as profit slumps once more

Nokia N8

By Reuters and Nicole Kobie

Posted on 27 Jan 2011 at 12:55

Nokia reported its third profit fall in a row and warned of a weak start to 2011 as it lost yet more ground in the all-important smartphone market.

Nokia said first quarter operating profit margin at its phone unit would drop to 7-10% this quarter from 11.3% last quarter.

Despite being the the world's leading handset maker by volume and sales, Nokia has lacked a hit smartphone since the N95, which it launched in 2006 before Apple stormed onto the market.

The industry changed, and now it's time for Nokia to change faster

Nokia's share of the smartphone market fell to 31% in the fourth quarter from 38% in the previous quarter.

"Growth trends in the mobile devices market continue to be encouraging," admitted CEO Stephen Elop, who joined the company from Microsoft last year. "Yet, Nokia faces some significant challenges in our competitiveness and our execution. In short, the industry changed, and now it's time for Nokia to change faster."

Nokia's declining smartphone market share wasn't the only concern, as its sales across the wider handset market also slid 10% from a year ago.

"Even more dramatic than the share loss in smartphones is the slide in market share in standard phones," said analyst Nicolas von Stackelberg from Macquarie Research. "It seems to be affected by a massive attack in the lower price tiers, in the non-smartphone business."

Elop said the firm would unveil a revamp of its strategy on 11 February.

"These results point to the daunting task ahead of Elop in 2011," Geoff Blaber from CCS Insight said. "Disappointing total volume, including smartphones, emphasises that these are dark days for Nokia."

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User comments

While I wouldn't wish Nokia ill, I've a E71 and something as simple as making a note was buried seven layers down. I still can't work out how to customise the homepage.

Their hardware is lovely - could they licence Android for a while while beavering away on something different?

By bubbles16 on 27 Jan 2011

Why don't they just quietly drop Symbian? The N8 hardware is excellent, let down by poor software. Stick 'droid or wp7 on it and see how the market reacts to that? An N8 with wp7 would have me sold!!

By onegin101 on 27 Jan 2011

I agree with both comments above. I've owned several Nokias in the past, including the excellent E71, which was slightly let-down by the OS.

I really like Nokia hardware, Symbian though, no thanks ...

By paulgspence on 27 Jan 2011

Me too. Always, always, always had a Nokia each time I renewed contracts for years, then the iPhone came along and there really isn't a viable alternative from Nokia anymore. Somehow, Apple just seem to make products that you want to have and to use, perhaps Nokia need to inject some kind of 'wow' factor into their proven technology...

By mattcooper1 on 27 Jan 2011

Symbian needs to go

I consider myself somewhat of a Nokia veteran. Having had several N-range Nokia's in succession.

I'm currently in possession of a trusty N95 8GB that is slowly falling to bits (I'll have owned it for three years in July). Right now, I'm waiting for the next big release from Apple, HTC or Samsung then I'm gone! The N95 8GB has been the best phone I've owned by far, and I used to sing it's praises every day (it used to delight me that much) but I've just about had it with Symbian.

Inexplicable foibles randomly develop and you keep having to flash the phone to rid yourself of them.. and after seemingly a little while.. they come back! Nokia also missed an opportunity with the third party application market... they were expensive as hell! I've paid £10 on average for Symbian apps I purchased. When I see the paltry charges for the majority of paid apps in the Apple and Android store (with many brilliant apps for free), I can't help but feel ripped off.

Nokia do make quality hardware but reliable software has never been their strength - Symbian was every bit as buggy in the ordinary N95 and the N75 I owned before it. That is pretty poor, and kind of makes me feel that Nokia were resting on their laurels.

Nokia need to swallow their pride, drop Symbian, and compete fiercely with Samsung for the crown of King of the Android smartphones. Symbian is dead.

By alvin on 28 Jan 2011

E71

I use an E71 and although the battery life is amazing the OS is awful.

By DaChimp on 28 Jan 2011

results review

Here ( http://www.allaboutsymbian.com/features/item/12528
_What_weve_learned_about_nokia_.php#) is a more rational look at the results. The graph alone illustrates that this is not as doom and gloom as some headlines have claimed.

Whilst not as downbeat as most of the media has reported, it still goes on to query the challenges Nokia face.

By Sarcen on 28 Jan 2011

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