It says something about the robustness of Nokia that, when the Finnish company unveiled a 90%-plus dip in profits for the first quarter of 2009, shareholders and analysts alike all breathed a collective sigh of relief that the results hadn’t been worse.
Plus, with CEO Olli-Pekka Kallasvuo expecting that the next quarter will see a stabilisation - possibly even nominal positive growth - in the company’s handset shipment volumes and overall market share, the company’s reputation as the driving force in mobile devices can mostly be said to have escaped untarnished.
Which is, perhaps, more than can be said about rival Sony Ericsson, which has also just announced its Q109 results.
Sony Ericsson claims net sales fell by 36% y-o-y to €1.74 billion, whereas Nokia’s sales of devices and services fell by 33% y-o-y. However, Nokia managed its costs more effectively and reports a positive operating result of €547 million in Q109, down by 71% y-o-y. Over at Sony Ericsson, however, an operating profit of €184 million in Q108 had slumped to a loss of €369 million one year later. The venture has posted a net loss of €293 million in Q109, versus a net profit of €133 million a year ago.
Nokia sold a respectable 93.2 million devices in Q109, down by 19% y-o-y and by 18% q-o-q. Sony Ericsson managed to shift 14.5 million devices in Q109, down by 35% y-o-y and by 40% q-o-q. As a result, Nokia’s global market share remains at around 37% q-o-q, while Sony Ericsson’s share has slipped by two percentage points to around 6%.
Seemingly, customers are still unimpressed by Sony Ericsson’s continued reliance on mid-range products focused on particular functions (eg: the camera-centricCyberShot line and the music-centric Walkman range) and are foresaking the vendor in favour of more exciting touchscreen and multimedia-capable devices from other vendors.
That said, Nokia is proving laggardly in delivering products using the popular touchscreen interface, nor has it innovated greatly on the user interface front. The company is pinning its hopes on the N97 smartphone, due in the summer and should drive usage of the new Ovi-branded applications store.
But the N97 could be overshadowed by the launch of a new iPhone model, which is also planned for the summer. And with operators such as AT&T negotiating aggressively to keep exclusive access to the iPhone, Nokia could face lower demand than expected for the new product.
Has the industry touched bottom and can we now look forward to an upswing in fortunes?
Apple, LGE and Samsung will announce their Q109 results next week, with Motorola following the week after, so we’ll see…
Tags: Apple, applications store, ASP, average sales price, Cybershot, financial results, financials, iPhone, LGE, mobile devices, mobile handsets, Motorola, N97, Nokia, Ovi, profits, quarterly results, sales, Samsung, shipment volumes, shipments, smartphone, smartphones, Sony Ericsson, Walkman