Nokia results given ‘ok’ by analysts

Nokia released its second quarter 2009 results yesterday, and research company, IDC, said the manufacturer was doing well in spite of market conditions.

Shipments declined 15.4 % year on year to 103.2 million units, but rose 10.7% sequentially. Devices and services net sales decreased 28% year on year to €6.6 billion, but rose 7% from the previous quarter. Gross margins improved slightly from 33.8% in 1Q09 to 34.0% in 2Q09. The average selling price (ASP) declined 4.6% to €62 from the previous quarter.

In such an economic environment, Nokia’s results are very good, said IDC. The lower volumes from the previous year are aligned with the overall market decline, and Nokia faced negative growth in all regions except Greater China.

However, Nokia’s sequential performance is particularly important, IDC claimed. In MEA and Latin America, shipments rose 27.7% and 34.8%, respectively, and in Europe shipments rose 4.5%. This denotes a more stable market environment in terms of demand and inventories, which has helped Nokia, but it shows that even during difficult times, Nokia has the strength to remain profitable and keep or even increase market share.

Surprisingly, said IDC, Nokia managed to increase smartphone shipments by 23.4% from the previous year and 10.5% sequentially. The second quarter of 2009 was a very competitive period for the smart phone segment. Apple launched the iPhone 3G S and increased volumes of its 3G version with the price cut. During the quarter, Palm launched the Palm Pre, a device that impacted the US market. In addition, HTC unveiled the second Android device, HTC Magic, a volume driver for HTC in 2Q09. Nokia’s flagship N97 hit the stores late June, but the company managed to ship half a million units during the period.

Nokia foresees difficult market conditions for the rest of the year, with stronger competition, IDC claimed. Nevertheless, the research firm added, it will continue to explore its market strengths in terms of manufacturing and distribution as key elements of its strategy to keep market share and profits.

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