Nokia cuts market share targets as Q2 profits plummet

by Thomas Ricker posted Jul 16th 2009 at 6:53AM

Ok Nokia, this is getting serious. The world's largest cellphone maker just announced a 66 percent yearly drop in Q2 profit while lowering its 2009 market share target for its cellphones. Originally, Nokia had expected market share to rise in 2009, presumably based on a successful launch of the N97 flagship device. However, outside of a core group of S60 diehards, the N97 has been universally panned in both reviews and user forums alike. And with nothing but rumors of an Atom-based Nokia netbook on the immediate horizon, well, let's just say that we're suddenly concerned about the health of our friends from Espoo.

Filed under: Nokia

Tags: financial, loss, market share, MarketShare, n97, nokia

Reader Comments (Page 1 of 1)

Highest Ranked

m3 @ Jul 16th 2009 8:19AM

At least Q2 is better than Q1, also Nokia managed to increase market share compared with the first quarter (also in smartphones). Why do you even have the N97 in the picture? Only Q3 will tell how it did, it was not avalable almost anywhere in Q2. E75 would have been more approriate as it was launched just in the beginning of Q2.

Low Ranked

Philly Z! @ Jul 16th 2009 8:17AM

Serves them right after helping the Iranian government supress it's ppl by helping shut down cell phone services when the iranian up rising needed phones the most

Shame Shame Nokia, and along with most Iranians I'm boycotting you too!

It's to bad be4 you helped the brutal dictorship in Iran I had hoped to go buy an in-locked N97 or N95 now I'll take my $500 + to LG or Samsung
I do like that nice LG Prada

Highest Ranked

Kay @ Jul 16th 2009 9:48AM

@Philly Z,

And what about Google, and what they've done, and continue to do, in China? Or Yahoo? Do you condemn them with the same vigor? Do you boycott Google?

I agree, Nokia Siemens Network - which is a different company than the cell phone making Nokia Corp, btw - should've not sold the equipment they sold to a government that is known to spy on its citizen. NSN should indeed get all the bad press that they are getting for what they built in Iran. However, let's keep things in order, shall we, and the facts straight? The equipment NSN sold Iran isn't in fact any different than what has been built in the US, Germany, and UK. The US government has wide access to telecom data, too, when they're suspecting a crime.

Other than that, this news is a of course like a piece of sweet candy for Engadget. And indeed, Nokia's got a lot to do. However, sites like Engadget constantly forget that they're looking at the world from an American angle, which, mind you, isn't everything in the world. Throughout Asia, Nokia's got a very different stand than in the US - in India, for example, Nokia was just awarded as "The Most Trusted Brand" this year by consumers - and so even though you think Nokia "sucks and fails because they don't have the iPhone or a Pre", that just simply isn't the picture elsewhere.

Like @m3 already pointed out, these were the results for Q2 - and the N97, which you talk about, didn't become available in Q2, so what does the N97 have to do with these results, Engadget?

Highest Ranked

Louis @ Jul 16th 2009 8:34AM

Agreed, 5800 and the E71 should be the focus of the relative success here. Why keep painting doom and gloom over Nokia's future? A quarter on quarter comparison would be much more relevant than a year on year one considering the fact that the impact of the recession is felt mostly this year. Instead, dearest Engadget chose to selectively post news that depict pessimism (perhaps praying that it will become a self-fulfilling prophecy?). Sorry, Nokia's doing better and just eat that.

Highly Ranked

Kay @ Jul 16th 2009 9:55AM

Here's another way to read the exact same news, Engadget:

http://www.gsmarena.com/nokia_q2_financial_report_is_out_shows_improvement_over_q1-news-1023.php
Nokia Q2 financial report is out, shows improvement over Q1

"Reading through the report shows that things are improving since the begging of the year but they are still not as good as they used to be. Net sales for the quarter rose 7% from last quarter's 9.28 billion, but are 24.6% lower than those for the same period last year. Operating profit has also shrunk by 71% from the same quarter the previous year, but compared to Q1's 90% it's not as abysmal."

Highly Ranked

KO @ Jul 16th 2009 9:53AM

GSM Arena is covering the same news as well - and they're pulling it out in a way that's pretty different to what you have here.
http://www.gsmarena.com/nokia_q2_financial_report_is_out_shows_improvement_over_q1-news-1023.php

"Nokia Q2 financial report is out, shows improvement over Q1"

"Reading through the report shows that things are improving since the begging of the year but they are still not as good as they used to be. Net sales for the quarter rose 7% from last quarter's 9.28 billion, but are 24.6% lower than those for the same period last year. Operating profit has also shrunk by 71% from the same quarter the previous year, but compared to Q1's 90% it's not as abysmal.

The Nokia 5800 XpressMusic continues to steam ahead with 3.7 million units sold for the quarter (adding up to 6.8 million total sales since last November) - more than a million handsets monthly. N-series and E-series phones also sold a million units morethan in Q1."

Highest Ranked

momchil karabulev @ Jul 16th 2009 10:00AM

operating profits quarter on quarter are up 676% (!), market share is up, smartphone share is up also

Highly Ranked

chilko @ Jul 16th 2009 10:06AM

operating profits quarter on quarter are up 676% (!), market share is increased, market share in smartphones is also incresed.
how is that bad?

Highest Ranked

Louis @ Jul 16th 2009 10:28AM

I'm really glad that Engadget readers are discerning readers, unlike the writers themselves. Really commendable!

Highly Ranked

Antony @ Jul 16th 2009 11:27AM

While this article is way over the top I wouldn't say Nokia are fine. A few points from the results:

(*) Although it sounds a little strange, mobile phones are a seasonal market. Q1 is always slower than Q2; a lot of phones are bought in December and so January is always quiet. So the fact that Q2 is better than Q1 isn't sign of a recovery; though it is sign that things aren't getting much worse. The year-to-year comparison is still very relevant.

(*) Over half the reported improvement in operating income is from Nokia Siemens Networks (from -122 to 2).

(*) ASP declined due to losing share of the smartphone segment and making up for it in low-end, low-margin, devices. This is the real problem for Nokia. They will always do well on overall marketshare because their scale and operations are awesome for voice and low-end feature phones. But these devices make no margin. To really bounce back Nokia need to take share away from Apple and RIM in the smartphone segment and that's not happening yet; though personally I like my N-97 and am intelligent enough to cope with the spacebar in a different position much as I'm able to cope with the keys on my Macbook being a bit different to the PC keyboard I use at work.

Neutral

Doax @ Jul 16th 2009 11:49AM

I've cried it before I'll cry it again, "carrier subsities please!" For one I won't buy a phone without being able to test one first. But at the same time I can't use a gsm phone, my tmobile plan has a G1 on it which I can't upgrade yet. And then my personal phone line is Sprint. So all that being said I would totally consider to get an N97 for my personal phone but I need CDMA.... Good luck Nokia.

Neutral

Tor Slettnes @ Jul 16th 2009 3:47PM

As a T-Mobile subscriber, you ARE using a GSM phone.
And sure you can use another one (e.g. an unlocked one) - you just have to pay the full price for it.

The N97 may not give you the best cost/benefit ratio though, seen as it does not support T-Mobile USA's unique 3G frequencies (1700 MHz).

Neutral

Ari @ Jul 16th 2009 12:18PM

anyone else see the pic and think "hey when is dexter coming back?"

Neutral

Patrick @ Jul 16th 2009 1:10PM

Sorry to say that after being a loyal Nokia user for many years I finally took the Apple plunge last week and it looks like I'm not going back. While I haven't used S60 5th Edition's touch screen interface the reviews indicated its not on par to iPhone's OS from an overall experience (depending on your desires, of course). Plus the build quality on the iPhone is far superior from any device (N-series or otherwise) I've owned. Until Nokia and other manufacturers (with the possible exception of RIM) can figure out the magic combination of design and features in the same way Apple has, they are going to continue to take a back seat in the same way my N79 has become the emergency backup to my new iPhone 3GS. Not trying to flame, just stating my opinion as a heavy mobile user.

And yes, I want to know when Dexter starts back too!

Highest Ranked

RB @ Jul 16th 2009 2:30PM

The N97 barely hit in the 2nd quarter. You guys have become such Nokia Haters I can barely stand to read your site anymore.

And Patrick I'm not sure what planet you live on but "Build Quality" on the iPhone is horrible. One of my companies does cell phone repair work and the iPhone is by far the number one phone we repair. That glass screen that goes all the way to the chrome bezel cracks real easy like.

Highly Ranked

bill @ Jul 16th 2009 2:24PM

What next spunk on an iPhone when apple posts financials? Journalistic bias boys, love your rosie coverage if the financial crater called Sony Ericsonn.

Neutral

Bazil @ Jul 16th 2009 3:20PM

@Patrick
"Until Nokia and other manufacturers (with the possible exception of RIM) can figure out the magic combination of design and features in the same way Apple has..."

Features??? What features? Do you mean the zoom in and out with the two fingers? Is this the feature that you adore? Hahaha!!

Come one fan-boy, does iPhone have multitasking, 5MP camera with flash, third-party applications (other than the ones that are "approved" by Apple), or the ability to change the UI and add new features to it with third-party applications? Till recently it didn't even have MMS, video recording, or copy-paste. And it still doesn't support folders, like a so-called "smartphone" should, but you have to throw all of your applications on the first screen instead. You can't send a file to another phone through bluetooth, and the web browser still doesn't support Flash. You can't even change the battery yourself, because it is hard-wired to the device. It is a 3G phone, but it doesn't support video-calls because it doesn't have a front camera!! All those are things that my N80 (the first phone ever with Wi-Fi) had in 2006, but iPhone still doesn't have them in 2009. Congratulations Apple!

Highly Ranked

KO @ Jul 16th 2009 3:27PM

"Nokia N97 and 5800 are currently the bestselling phones of Vodafone UK"

Vodafone Top 10 Best Selling Phones (July 2009):

1. Nokia N97 32GB
2. Nokia 5800
3. Sony Ericsson W595
4. Sony Ericsson C510
5. Samsung Jet
6. Samsung Tocco Ultra Edition
7. Samsung Steel L810
8. Nokia 6300
9. BlackBerry Storm
10. HTC Magic
http://bit.ly/XtG42

Of course, Engadget boys, it can be that UK consumers are just "dumb" buying those "horrible Symbian phones," but nevertheless that's what they're buying!

Neutral

josesxi @ Jul 16th 2009 3:48PM

They're not buying anything. Those cheap britts get those Nokias free on contract.
If Vodafone had the iPhone it would be #1 by far.

Neutral

Lebeu @ Jul 17th 2009 8:43AM

"Universally panned in both reviews..."

Universal != one Engadget review...hardly even a subset for that matter XD

Neutral

andrew @ Jul 17th 2009 10:10AM

Nothing on the _immediate_ horizon? What about the Maemo 5 device?

http://www.engadget.com/2009/05/25/nokias-n810-successor-coming-later-this-year-with-3g-and-maemo/

Neutral

Zohe @ Jul 20th 2009 5:31AM

Is engadget owned by Apple or something?

The only site i;ve read bashing the n97 is this one, where are the other sites 'panning' the n97?

what is this obsession with the iphone? I still dont understand whats so good about it? The web browsing is nice, i'll give you that... but in terms of overall experience, the n97 rocks! Iphone does not.

Simples!

Neutral

ZZTech @ Jul 29th 2009 1:05PM

Nokia admits to supporting the regime in Iran with spying equipment and support of that equipment. This equipment has led to the deaths and torture of many young Iranians, for crimes against the Iranian state, such as peacefully gathering on the street.

However, Nokia shills constantly compare this 'lawful intercept' action to the action of search engine service providers, and the actions of chemical manufacturers selling the building blocks for nerve gas, or arms manufacturers selling bullets. ("Don't blame us - we just make bullets - we don't pull the trigger").

Well - I guess that the rest of the world has a different perspective. Nokia deserves to be shunned for its corporate greed. As the photograph here shows - Nokia products are splattered with blood. Not just the blood of Iranians but the blood of innocent people the world over whose conversations and communications are monitored by oppressive regimes.

Not only would I recommend that no one buy a Nokia product - I would also throw away any Nokia product that you already own.