Finland’s Nokia might still make about one in three mobile handset sold around the world, but the company is has been taking it on the chin from competitors like Apple and RIM, which have been seeing astonishing success in the smartphone market. And some of those numbers came home to roost in Nokia’s first quarter financial results: while the company managed to earn €349 million on €9.52 billion in sales—a more than 50 percent increase in earnings year on year and a 3 percent increase in sales—the company missed analysts’ earnings forecasts, causing the stock to drop in trading following the earnings announcement.
“In Q1, Nokia delivered both year-on-year net sales and operating profit growth,” said Nokia CEO Olli-Pekka Kallasvuo, in a statement. “We continue to face tough competition with respect to the high end of our mobile device portfolio, as well as challenging market conditions on the infrastructure side.”
Nokia also disclosed that while it plans to launch its Symbian^3 operating system in the second quarter of 2010, it doesn’t expect Symbian^3 products to reach consumers until the third quarter&helip;which will again have it playing catch-up in the marketplace to the likes of Android and Apple’s iPhone OS 4.
In the meantime, industry watchers expect that the main way Nokia will try to compete with the likes of the iPhone, Blackberries, and Android devices will be to slash prices on its existing phone offerings—and, that, in turn, will cut into the company’s revenues. Nokia did see its smartphone shipments jump 15 percent to 21.5 million units in during the quarter—and the average sales price of a Nokia smartphone dropped 17 percent during the quarter to €155. Despite that success Nokia said it expects sales in its devices and services division to stay roughly flat in the second quarter of 2010.