Nokia has released their Q1 2010 results, reporting an operating profit of €488 million, with net sales €9.5 billion (up 3% YoY). Nokia's device and service division's profits were €831 million, up 52% year on year. Margins in devices and services were 12.1% (up 1.3% YoY and down 5% QoQ). Converged devices sales (smartphone) were 21.5 million, compared with 13.7 million units in Q1 2001 (up 57%) and 20.1 million units in Q4 2009 (up 3%). As such, worldwide converged device ('smartphone'😉 marketshare was 41%, up 1% sequentially and 3% year on year.
Read on in the full article.
"This represents a delay in introducing the first Symbian^3 handsets, which were initially expected to arrive on the market at the end of Q2."
NO! It does not represent a delay - because no-one ever said they would be introduced by Q2 2010.
Here's the roadmap (this revision is from February):
http://developer.symbian.org/wiki/index.php?title=Symbian^3&oldid=42404
It clearly says 'Handsets from H2 2010'.
Nokia shares - 13% post announcement, Apple +14% : whilst you may deride the markets long term predictive abilities it`s ability to forecast the each companies future profitability over the last 3 quarters has been absolutely correct. After all Apple make the same revenue selling only 8.7m phones. Also the falling average handset price demonstrates that Nokia have only been able to succeed by pushing out cheaper low end devices (I would love to see comparative figs for YoY and QoQ smartphone average handset prices.
Yes the 1% smartphone growth to 41% is positive but relying soley on the bottom end is playing with fire given wave of Android and possibility of iPhone Nano.
Nokia desperately need to reoccupy the higher end and I think the N97 is going to haunt them here.
Interesting and positive results. Also good to see Nokia admitting that they don't have anything to compete against the iPhone and the new Android handsets at the high end. I'm sure they will have come year end but that's the truth of the matter just now.
Nokia obviously realise this and are claiming the low to mid tier market just now. As we all know, the high end market is a precarious one and driven by fashion - what's hot one year isn't the next as the RAZR and N95 have found out - so this makes sense.
As for the analysts, first they get Q4 2009's forecast wrong by underestimating it and then Q1 2010's forecast wrong by overestimating - not to mention the complete balls up they made of Apple's numbers! Do they actually know what they're doing?
3 things spring to mind from reading this:
1.) Good that they have increased market share yet again. Yet more proof, if any were needed, that those saying the Nokia/Symbian/S60 was/is in any way in decline are talking utter rubbish as usual. US tech blogs, and iPhone and Android fanboys, I'm looking at you.
2.) Competitively, at the high end, Nokia are in a little bit of a lull right now - a gear change, or a pit stop for a tyre change. We're between the last bunch of high end Nokia smartphone releases last year and the next super-charged Symbian^3 smartphones. Obviously while they're in that pit stop, competitors gain ground on Nokia, it's obvious and expected. No big deal.
3.) I take note of Brendan Donegan's comment above that there has been no delay, and either way I am glad that Nokia is taking the time to get it's next crop of smartphones right. If they have decided to beef things up in certain areas to be more competitive, or decided to take a bit of extra time to ensure the new releases are as shiny and good as they can be, that's all fine with me (in contrast to the whingers after the release of the C-series the other day). Nokia have more than enough market share and installed base to afford to take time getting things right, as we have seen from them growing market share during this competitive pit-stop. It is certainly also good that they are full steam ahead on service improvements and delivery (e.g. free nav, ovi store improvements etc) as software is a more fast-paced arena.
I have updated the story to reflect the delay issue. To be fair OPK has just said on the conference call that Nokia's Symbian^3 device is behind the internal schedule for this. We are only talking about a few weeks (6-ish maybe) - and it just happens to be at the end of a quarter...
snoFlake - agreed - market is good short term, but performance is not the same as long term strategy (as we have both said in past). I think you can see that all players in this market have stuff coming up that is going to be both positive and negative...
I don't know anything about what goes on inside Nokia (not really true, but certainly nothing to do with device release schedules), but I was just pointing out that our *public* roadmap has had H2 as the estimate for quite some time. When do Apple plan to release the new iPhone? I wager it's no earlier than the end of June.
You didn't look at the geographical split. Nokia dominate in Africa and Latin America. In the other more important markets they aren't doing too well. 😞
Unregistered wrote: Nokia dominate in Africa and Latin America. In the other more important markets they aren't doing too well. 😞
Really? Seems they're doing pretty well to me, if you read the relevant sections of the doc. They had a 27% fall Year on Year in North America, but so what, the US is a minor mobile market globally (despite the amount of hype and hot air coming out of there) and Nokia traditionally doesn't do well in the US. APAC fell 3% too but again so what, Nokia practically own the region - even in smartphones alone Symbian devices (mostly Nokia) command over 80% smartphone market share there!
And every other region saw growth between 2% and 42%. That's not "aren't doing too well". 😊
This just shows Nokia needs high end phones, low and middle ware phones just don't cut it when it comes to revenue and profit.
Nokia are leading the market share but low end phones have razor thin margins, just compare this to the iPhone (inevitable), sold only 8.7 million units this quarter but made US$ 5.78 billion in revenue close to half of Nokia's total and this from nothing in only 3 years!
High end phones have high margins and buyers are more willing to spend money on applications and services.
Nokia needs to release mind-blowing new Symbian 3 phones soon.
I hope they do, but right now Nokia are off my buying list, and most of the people I know with disposable income.
I find it very hard to sympathize with Nokia after the N97 debacle. Nokia's "high-end" flagships have been hobbled by some extremely poor engineering choices. And far from fixing those problems, they continue to perpetuate designs based on underpowered chips with inadequate memory - witness the new C series. It's as if they insist on passing off those outdated components - even to high-end consumers -hoping no one notices the inferior performance. This has everything to do with leadership and management decision.
I won't kick Nokia while they're down (the stock), but I will say that they're pinning all their hopes to Symbian 3 for a turn-around. They better hope it works out for them; another N97/E72 type of experience will surely doom them to scratching out some kind of a profit on throwaway low end phones.
My i8910 running S60v5 is only still around due its fantastic camera and great video playback, but it very likely is my last Symbian device. If I go with Nokia, it will only be with something running Meego, if it finally starts actually shipping that is.
Making over a billion dollars a quarter profit from their handset division isn't 'scratching a profit'.
Nokia will not be changing their low/mid tier strategy - why should they? It clearly works. Symbian^3 is about getting some of the high end back and, frankly, I'd rather wait until they get it right.
Looking at market cap, profitability and cash reserves rather than rumoured bid for ARM Apple should take over Nokia - instant low end portfolio and developing nation penetration and really great new open source OS 😃
Been waiting for almost 2 years for Nokia to go bust. Guess what? It hasn't happened!!! Profit is profit no matter how you cut it. That they are able 2 maintain market share without being able to compete at the high-end, doesn't that tell you something about their strenght? The high-end devices will come! What is it about that, that you don't understand? You keyboard analysts are just so full of yourselves!
"We will not ship the product before the quality meets the demand of the end user."
Judging by the N97's road to acceptable quality they may release Symbian^3 phone late 2011 😊 Or never...
Unregistered wrote:I find it very hard to sympathize with Nokia after the N97 debacle. Nokia's "high-end" flagships have been hobbled by some extremely poor engineering choices. And far from fixing those problems, they continue to perpetuate designs based on underpowered chips with inadequate memory - witness the new C series. It's as if they insist on passing off those outdated components - even to high-end consumers -hoping no one notices the inferior performance. This has everything to do with leadership and management decision.
I think that why they made a statement saying Symbian^3 devices will only come when ready. That's a strong signal to me.
snoFlake wrote:Looking at market cap, profitability and cash reserves rather than rumoured bid for ARM Apple should take over Nokia - instant low end portfolio and developing nation penetration and really great new open source OS 😃
One might almost think you were trying to wind up two sets of people at the same time... Mutually Assured Destruction? 😃
Unregistered wrote:You didn't look at the geographical split. Nokia dominate in Africa and Latin America. In the other more important markets they aren't doing too well. 😞
I didn't, but there's not really a lot there that can't be explained by a) seasonality (Christmas, Chinese New Year) b) improving economic conditions (YoY results) c) small bases (for the larger percentage numbers).
I don't care if they need four more weeks to finish the OS and the smartphone, but please, just make it good, without bugs (or at least without the obvious ones).
How it is possible, that Nokia 2010 Q1 market share is ca. 33% and it's up from last Q1, but it was 37%.
What is the new method to count market share?
The year-on-year growth in smartphones is very encouraging on the face of it. But as Symbian^1 devices work their way down the Nokia portfolio is it that surprising. Imagine a year from now where S60 devices have all but supplanted S40 handsets, will the majority of their shipments be 'smartphones' with requisite impressive numbers?
Not that I wish to spark any debate into what is or is not a smartphone, but if all Nokias become smartphones by default, does this not warrant a more detailed segmentation of Nokias smartphone numbers? It would be a good marketing ploy for Espoo to say that a year hence, EVERY Nokia is a smartphone?
I think it is important to point out that Nokia isn't really gaining new market shares. It more like converting people who used the S40 (dumb phone) user to S60 through their competitive pricing.
I the near future, phones will not be labeled as smart vs dumb, but more as in "high" vs "mid" and 'low' tier phones.
Nokia will make every phone a smart phone going forward simply by making them affordable; the division and analysis of smart vs dumb phone breakdown is going to blur.
Yipee more Nokia news!!!!
I wonder how they dismiss news of Google Maps with voice navigation is now avaiable in the UK for all android 1.6 devices and above.
Nokia still produces crap phones, period
Crap phones are ok for Africa and Latin America.
Well done Nokia!
Unregistered wrote:Yipee more Nokia news!!!!I wonder how they dismiss news of Google Maps with voice navigation is now avaiable in the UK for all android 1.6 devices and above.
Have Google fixed the ridiculous maps having to be downloaded problem yet?
Any good sat nav device has a stored internal map. Any device that doesn't is useless out of connection area.
I found out Apple they sell iphone with very hight profit margin. nokia seem very fairly play with user, sell with a low profit margin, It's worth to use nokia, also offer a rich free application for nokia user too.
so i feel iphone is cheating user
Unregistered wrote:How it is possible, that Nokia 2010 Q1 market share is ca. 33% and it's up from last Q1, but it was 37%.What is the new method to count market share?
http://www.nokia.com/press/press-releases/showpressrelease?newsid=1393524
"Beginning in 2010, Nokia is revising its definition of the industry mobile device market that it uses to estimate industry volumes. This is due to improved measurement processes and tools that enable Nokia to have better visibility to estimate the number of mobile devices sold by certain new entrants in the global mobile device market. These include vendors of legitimate, as well as unlicensed and counterfeit, products with manufacturing facilities primarily centered around certain locations in Asia and other emerging markets."
Instead of raving about possible expansion in emerging markets, just sincerly answer the following simple question:
Would you like the idea of having Nokia stocks in your pension portfolio?
My answer is `no`. For longterm investors the stock is a total failure, having now the same value as 11 years ago and no product or idea which would help fighting two competitors. With p/e close to 30 and limited chance to expand, this stock seems to be doomed.
Sorry for repeating the truism, but they do not have a breakthrough product, unlikely have anyting interesting this year and actually the best Nokia for your money is a second hand phone, depending on your needs something like e71, e63, e61, e90 or n95, n82, n86 (or one from each category 😊.
Henryk wrote:Would you like the idea of having Nokia stocks in your pension portfolio?
Since they pay dividends I would. Pensions funds depend on a lot more than just raw stock price.
Unregistered wrote:Really? Seems they're doing pretty well to me, if you read the relevant sections of the doc. They had a 27% fall Year on Year in North America, but so what, the US is a minor mobile market globally (despite the amount of hype and hot air coming out of there) and Nokia traditionally doesn't do well in the US. APAC fell 3% too but again so what, Nokia practically own the region - even in smartphones alone Symbian devices (mostly Nokia) command over 80% smartphone market share there!
And every other region saw growth between 2% and 42%. That's not "aren't doing too well". 😊
Really? Do you really have proof that NA/US is a minor market? Maybe to the >500m subscriber base in India and China (which btw was a very lucky guess based on estimating by total population in those countries), but NA is probably #3 or #4 in the world. quoting (very reluctantly) from Wikipedia:
http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use
My point being - your guess is poor and baseless.
As for Nokia's performance numbers, Mr Mark, the analyst are rarely right, but it's very easy to pick apart Nokia's number and show them how much their product managers are goats just by using their own press release - the drop in average handset price drop was probably what set off the sell off of Nokia shares (64EUR -> 62EUR), because it's nearly impossible to drop the price of low end handsets, which means their "high-end" handsets are probably mispriced to start with and the market forced the drop. Which comes back to some keen observations by many ppl - S60 is pretty irrelevant in the high end market (just look at the continuing drop of the N-series and the bare crawl of the E series), while S40 is continually replaced by S60 (I think there's maybe only ONE s40 handset released in 2009). The argument that Nokia's performance is acceptable is pretty apologetic. i'm pretty unimpressed about Android's performance because so many different variations have hit the market has hit market but barely make a dent relatively, but Apple has only TWO base variations (I don't count the different storage sizes as variations) of their products, but managed to sell 25mil, which basically blows any single Nokia handset out of the market. My point being - Nokia is making a really huge bet on Symbian^3. Few investors ever have the appetite to play in that kind of game because it means Nokia's back is pretty much against the wall in the high end market as they've pretty much ran out of value offerings on the high end smartphone market. BTW, as you can see, this is a response to your posting last time, so please do enlighten us hear on how Nokia as actually making progress in the high end smartphone market, preferably by comparing product by product sales figures. I can almost guarantee you that any number you'll find will show how much a laughing stock Nokia products are on a single product level (adoption rate by big corporations, market sales by product region in high end smartphones, consumer satisfaction, retail sales). I never disputed nokia's overall market performance, but my argument remains - Symbian is pretty irrelevant on the high-end smartphone market. the N97 is probably their best offering in features, but the numbers there are pitiful relative to their competition, and the e-series are considered mid range handsets now, not even enterprise business class handsets. The numbered handsets are low-end handsets that were meant to be given away. Do you have comparisons on which pay monthly tariffs their handsets are on offered? It's not enough to just say they're given away free as well, because the tariff range pretty much tells which market it's targeted for. But I can see you're just as enthralled by the shoddy Nokia marketing spin machine as every other arrogant Nokia fanboy there is out there. Meanwhile, investors (including me) and consumers (the ppl really financing Nokia) are continually pissed.
-Gene