Shares of Nokia plummeted after the world’s largest handset maker posted a brutal quarter and a loss of $832 million. And while the company raised its industry outlook for the rest of the year, its dissolving presence in the U.S. is particularly worrisome. And there’s not much reason to expect that figure to turn around anytime soon in the face of increasing competition from the iPhone — which continues to eat Nokia’s lunch — as well Android and Palm’s webOS.
Nokia took a staggering write-off of nearly $1.4 billion in Nokia Siemens Networks, the joint venture with Siemens that has become a financial albatross for both companies. Meanwhile, net sales fell to $14.62 billion, down from $18.18 billion in the year-ago period, as the company suffered from a shortage of components across its product portfolio.
The write-down of Nokia Siemens Networks wasn’t entirely surprising — as Om noted nearly a year ago, the recession has hit the entire telecom industry hard by forcing network operators to pay off debt rather than upgrade their networks. And Nokia offered a ray of hope for the handset market, predicting a 7 percent increase in 2009 from last year rather than its previous forecast of a 10 percent drop.
But the company continues to lose traction in the U.S. at an astonishing rate, with North American sales down more than 31 percent over last year. Nokia may indeed be the dominant mobile player in the developing world, but it’s becoming less relevant by the day in North America.