Nokia Profits Slump While Smartphone Share Rises

Nokia has released its results for Q2, 2010. They reveal a 40 per cent slump in profits to €227m (£192m), compared to €380m a year ago. On a slightly brighter note, the company increased its share of the smartphone market by 1 per cent to 41 per cent in the quarter, having sold 24m smartphones. Sales of all mobile devices in the quarter totalled 111.1m, an increase of 8 per cent year-year-year, and 3 per cent on Q1, 2010. Total sales for the quarter were €10bn, a 1 per cent increase on Q2, 2009, and a 5 per cent increase on the previous quarter.

The problem for Nokia, however, is the price it is obtaining for its handsets. The average selling price of a Nokia handset fell by €1 compared to the previous quarter, to €61. The average price of a Nokia smartphone, however, fell by 8 per cent compared to the previous quarter,to €143. Over the past year, the average price of a Nokia smartphone has fallen by 21 per cent.

Given this performance, it is perhaps no surprise to hear rumours that Nokia is on the hunt for a new CEO, but for the moment, the incumbent, Olli-Pekka Kallasvuo, continues to talk the talk. He says: “Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future. For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our mobile phones business, helped by an improving line-up of affordable models.

“In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fightback at the higher end of the market.”

Nokia also revealed today that there are now 13,000 content items (including apps) in the Ovi store, and that consumers are downloading content from the store at the rate of more than 1.7m items each day.