Ronnie05's Blog

Nokia still struggling in the smart-phone act

Posted in Mobile Devices and Company Updates by Manas Ganguly on June 20, 2010

Apple struggles to provide LCDs for iPhone 4G’s advance orders. Nokia shares plunge 9% on lower devices and services outlook. The comparison board between Nokia and Apple has been like this for more than an year now. And from the looks, the story doesn’t seem to be getting better for Nokia and the story for Apple will possibly get better. Quite a difference.

Refer to earlier posts Fixing Nokia, Slide @ Nokia I, Slide @ Nokia II, Slide @ Nokia III.

Investors punished Nokia, sending its shares down 9 percent to 7.22 euros in Helsinki yesterday, the lowest level since March 9, 2009. The stock drop put the market value of Nokia at 27 billion euros ($33.3 billion), below the $34.4 billion of rival Research In Motion Ltd. and Apple’s $240 billion. The full-year adjusted operating margin in handsets could come in below the 11 to 13 percent range forecast earlier, mainly because of its weakness in high-end smartphones

To provide a summary: “The smartphone revolution has started and Nokia is not there,” said Helena Nordman-Knutson, a Stockholm-based analyst at Oehman. Can’t agree more. The lowered outlook is “an implicit statement that the Symbian user experience won’t be fixed this year and MeeGo won’t arrive in time to make a difference to 2010 either. The outlook cut also firms up the thought that Nokia is itself not sure that its 2nd half portfolio will be strong enough to compete in the smartphone space. While Nokia has held on to the 41% smartphone market share, H2 may see it making losses on this count which it may not be able to make good in some time to come.2010 doesn’t look like to be the year in which Nokia’s problems get fixed and investors are running out of patience and will want to hold someone accountable. The latest movements/re-organisation around the company provides very little succor especially in light of the fact that Nokia has had 3-4 such re-orgs in the last 3 years.

Bottomline: With the Apple 4G already a bestseller, with the phone still in a 2 month launch horizon and an impressive array of Android devices, the smart phone show will be dominated by HTCs, Motos and Apples of the world. Nokia hardly has anything exciting at this point to offer (The N97, N900 have disapointed and i am discounting the N8!). Expect Nokia to loose 5-6% market share points over the next 3 quarters.

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4 Responses

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  1. […] Bottomline: Nokia needs S40 Full touch (and QWERTY) devices to protect its market share in its traditional mid-tier stronghold. The X3 is not exactly the best start, but it heralds Nokia moving into Touch devices for the mid tier Seris 40. One can only Hope that Nokia’s next in roadmap devices are better than the X3 in terms of Touch experience. Nokia desperately needs to hold onto to its mid tier market shares and can ill-afford to lose these segments, given its already weakened position in high end segments. […]

  2. […] grip on the smartphone markets has reduced from a monopolistic 60% to a struggling 45% 2.It had lost 67% of its Market Cap after the introduction of Androids and iPhone, in the last three years.Nokia market value has […]

  3. […] Nokia attributes the lowered forecast to three primary factors, including aggressive pricing from competitors, lower average prices and margins across its own product line, and “competitive dynamics and market trends,” particularly in China and Europe. However, the bottom line is that Nokia isn’t selling as many phones as it would like. Check Gartner reports here. […]

  4. Quora said, on June 9, 2011 at 1:05 pm

    Can Nokia ever regain its market dominance in India?…

    It is difficult for Nokia to regain market dominance (the 70% market share situation) in India. Here are the reasons 1. Trade fragmentation: With commoditization of the handset category, the channel power is increasingly shifting to retail. Nokia still…

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