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Summary:

Following in the footsteps of LG and Sony Ericsson, Nokia today reported a poor performance for the fourth quarter of 2008, for which it blamed the global economic downturn. Handset sales during the latest three-month period were 113.1 million, down 15.3 percent from the fourth quarter […]

nokia_messaging_e71_03_lowresFollowing in the footsteps of LG and Sony Ericsson, Nokia today reported a poor performance for the fourth quarter of 2008, for which it blamed the global economic downturn. Handset sales during the latest three-month period were 113.1 million, down 15.3 percent from the fourth quarter of 2007 and 4 percent lower than third-quarter 2008 sales of 117.8 million units. Nokia also lost 1 percent market share during the quarter. And not only did they sell fewer phones, they sold them cheaply; Nokia’s average selling price for a handset declined to 71 euros from 83 euros. 

But forget all that, for the worst is yet to come. Nokia is forecasting a 10 percent decline in global handset sales — not just for the company but for the entire industry. This is not a good sign for anyone making a living by selling to the mobile industry, especially chipmakers like Texas Instruments.

Nokia had previously forecast a 5 percent decline in sales, so things are clearly a lot worse than anyone thought. Sales are going to be swimming with the fishes for the first half of the year, Nokia indicates, though things might get marginally better in the second half of 2009.

  1. Quite a contrast with Apple. To me, Nokia has been irrelevant for awhile now. They don’t have any compelling smartphones that i am *aware* of. That last point is important. They may have some nice smartphones, but they don’t have *awareness* like Apple and RIM do.

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  2. [...] It Out> Gigaom, Palm Pre (OS Attack), Palm Pre, Nokia Q4 [...]

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  3. Nokia does have a phone coming out this year that was supposed to be a good alternative to the iPhone. Now with the Palm Pre though that alternative is looking more like a distant 4th place contender.

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  4. @Paul, I think Nokia N97 could be a good way for them to combat the charge of the touchscreen devices. I think as a company they have some serious issues though.

    @Parkte

    I think their response to Apple has been weak, though I wouldn’t call them irrelevant. No company that sells 113 million phones is irrelevant. You should see how big they are in Asia, Africa and Europe. In US, they are terrible.

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  5. they should have started developing smart phones 8 years ago!!

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  6. All,

    Nokia has had a family of smartphones on the market over recent years. They’ve done very well overseas as Om noted, however Nokia lacks significant market share in the US due to their dislike of the carrier requirements for device modifications. This fact notwithstanding, Nokia is the leading manufacturer of smartphones world wide.

    I wouldn’t be quick to write Nokia’s obituary as it has been written before, and Nokia is the market leader in cell phones by far. The real questions are whether or not Nokia can carve out market share in the US, and will Apple’s closed OS for the iPhone yield a limited market similiar to the one Apple created for itself with the Mac back in the 80′s?

    My $.02.

    Best,

    Curtis

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  7. I agree that Nokia cannot and shouldn’t be written off. Their size and scope enable them to do things that others can’t (like the $8 billion acquistion of Navteq). They’re still the global leader by far, but they don’t want to play nice with the carriers.

    But I think that’s going to be changing soon, as we’re already seeing a few mid-level phones trickle out with AT&T, T-Mobile, and the CDMA Verizon Wireless. It’s no secret that the gorgeous E71 will be branded and subsidized by AT&T soon.

    Look for Nokia to make a big push for the U.S. market soon, as OPK told me they haven’t been focused on it because one could argue there was no massive smartphone market here. With the Symbian Foundation rounding into form (which AT&T is a founding member of), I expect to see a lot more Nokia smartphones and mid-level U.S. phones released and subsidized in the next two to five years.

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  8. [...] 2008 sales of 117.8 million units. Nokia also lost 1 percent market share during the quarter. Read more Courtesy: [...]

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  9. [...] it failed to do in all other reporting segments. But that segment had its own bad news as Samsung (like Nokia yesterday) expects the handset market to contract by up to 10 percent in [...]

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  10. @Curtis

    I think you are right about pretty much everything, except that I disagree that Apple is the Apple of old. Nokia has failed to innovate and move the needle precisely because of its #1 position. Apple is killing them with innovation and making more money at it. Time to rethink the focus – sometimes you need to sell fewer phones to make bigger profits. My two cents.

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