Nokia expects dip in market share
Published: 08 Sep 2008 10:54 BST
The mobile-handset market is worsening, as Nokia, the world's largest maker of mobile phones, said on Friday that it's lowering its third-quarter market-share outlook due to the weakening global economy.
The Finnish company has dominated the mobile-handset market over the past few years. In the last quarter, Nokia reported that it had secured 40 percent of the entire worldwide market. At the time, executives were confident that the company would maintain this level. Now, as the worldwide economy worsens, executives said they expect Nokia's market share to slip slightly in the third quarter. However, the company still expects to increase its market share for the year.
Executives blamed the shift in expectations on a weakening global economy and a reluctance to engage in a price war with certain competitors. Even though the company expects to increase the volume of device sales by 10 percent or more this year, Nokia executives said that consumer confidence has been shaken and prices are falling. The company didn't specifically name which competitor had cut prices.
Nokia has several new handsets in the pipeline, to be launched during the quarter, but sales of some of its mid-range products have been slower than expected, the company said. Nokia did not specify which handsets have not been selling as well.
Nokia has not been the only handset maker to feel the pinch of a slowdown. Samsung Electronics said, during its second-quarter earnings call, that it also sees the weakening economy affecting its sales in the second half of the year.
The second quarter was slow in the US market, with sales down by 13 percent, according to the NPD Group. Nokia has relatively little market share in the US, but slowing sales in other developed regions, such as Europe, Japan and Asia will have a great impact on the company. Nokia sees developing markets as its source of growth in the near future.
Credit: Nokia market share to take a hit from CNET News
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