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Get out of town... up to whopping 10%! Those crazy Nokia execs. Now I can buy $100 phone for only $90 or so. Woohoo! Free $10!
An extra 10% in a low margin business is quite significant. This will likely affect the stock in a negative fashion in the short term because their EPS will be lower.
Since selling a phone that costs 80$ to make for 60$ is a goddamn genious idea.
Uhm, honey, when the hell was cellphones, in general, a low margin business. Sure, some cellphones, like the Centro, are sold at very attractive price points (although Palm is likely getting a subsidy from the carrier to supplement their bottom line). But most phones, when the subsidy is included, are sold at far more than the value of the hardware and the software.
Hi honey, Is a net profit margin if 8.24% high in your book?
Apple which is touted as a high margin electronics company has a net margin of 14.36%
Microsoft, on the other hand 27.13%. That's a high margin business IMO
0megapart!cle @ Jul 31st 2008 2:16PM
Uhm, honey, when the hell was cellphones, in general, a low margin business.
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Exactly, but I'll offer some context to all this:
Posters generally from the USA associate Nokia with low-priced phones, and therefore, everything they do as low-priced and low-quality. Apparently they are not big in the USA. In Australia (from first-hand experience) and most of Europe (as I understand it) it's quite different. At least the perception is.
Not everyone is as ballin' as you, sir NutMac.
Do North Americans really take Nokia products as cheap?
Because that would be kinda funny as Nokia owns those expensive segments first with smart phones and secondly with the premium phones 8xxx series and the super luxury phones Vertu.
Plus Nokia as a brand is actually most valued from Europe. Thought i guess it's not too much of suprise as Nokia phones aren't really sold in USA, right?
I'm basing the margin thing on their published financial reports. Has nothing to do with the phone costing $1 or $1,000. Nokia's net margin is 8.4%, which is low compared to, say Rim (21.52%)
Not sure where you have gotten those numbers, but anyways example Nokia's profit rose 8% in last Q(Q2) while most of the new models are coming out this Q or have come out now.
Yeah, In the U.S. Nokia's are mostly considered crap phones. That's because they mostly (maybe even only?) "sell" old and low end models, generally bundled as sub $50 or even free phones with a service agreement with a Provider.
Seeing all the reports about people modding/hacking or simply generally loving their "awesome" Nokia's was rather confusing at first. They don't really advertise much here, and the internet aside, you really don't see them much at all until you mention the keywords: broke, cheap, free to the guys trying to sell you a 2-yr contract.