Nokia further reduces forecast
Published: 05 Dec 2008 12:00 GMT
Nokia on Thursday lowered fourth-quarter sales expectations for the second time in a month. The world's largest maker of mobile phones also warned it can no longer predict its market share for the quarter.
Before the start of its Capital Markets Day in New York City, Nokia broke the bad news to analysts and investors that it sees more trouble ahead in the current quarter. Specifically, the company expects device volume to fall below the 330 million units it estimated in mid-November that it would sell for the quarter.
The company also said it doesn't see the situation getting much better in 2009, with an expectation of sales falling by at least five percent from 2008 levels. While Nokia has previously said it expected a "market decline" in 2009, it hadn't specified how much of a decline.
"The mobile-device-market slowdown has continued more rapidly than previously expected since Nokia issued an update on 14 November, 2008," the company said in a statement. "The industry continues to be impacted by the effects of a global consumer pullback in spending, currency volatility, and decreased availability of credit."
The company also blamed "insufficient visibility in the marketplace" to confirm its previous expectation of 38 percent or better market share in the fourth quarter.
That said, the company said it did expect to gain market share in 2009.
While it's evident consumer spending has slowed down in the industrialised Western markets, Nokia executives also pointed to slower consumer spending in developing markets. Nokia has been very successful over the past few years selling low-cost devices in these markets. The company had believed these developing markets would be relatively immune to the slowdown hitting developed countries. But the company is finding that not to be the case.
Read this
Leader: Nokia and the battle for open source's soul
The formation of the Symbian Foundation is good news for the mobile industry but the open-source community could see some ethical compromises…
Nokia has also taken a hit in the high-end smartphone market. Even though the company still dominates the market with about 42.4 percent market share for the third quarter, according to market researcher Gartner, it did see sales slow in that quarter.
Nokia wasn't the only company to be hit in the third quarter. This week, Gartner reported that overall sales of smartphones had slowed to their lowest level since the firm started tracking the sector.
In addition to the weakening economy, Nokia is also facing more competition in the smartphone market, especially from companies such as BlackBerry maker Research In Motion and iPhone-maker Apple.
Earlier this week, Nokia announced its latest smartphone, the N97, which offers a tilted, full Qwerty keypad and a touchscreen. The new device will sell for €550 (£469).
As competition in the handset market intensifies, Nokia is also focusing more attention on its services. The company also announced this week enhancements to its messaging and mapping services that can be used on mobile devices as well as PCs.
Credit: Nokia further reduces forecast from CNET News.com
Did you find this article useful?
Digg
Slashdot
Del.ici.ous
Stumble
Reddit
