Nokia posts $834 million quarterly loss, smartphone share down to 35%
By Thomas Ricker 
posted October 15th 2009 8:12AM
posted October 15th 2009 8:12AM
Nokia just posted a net loss of 559 million euro (834 million dollars) for the third quarter -- its first quarterly loss in a decade according to the AFP. The loss comes after a reported 20% drop in sales and 1.17 billion euros in write-downs, mostly for impairment charges on Nokia Siemens Networks. Nokia also said that its smartphone market share dropped to 35% versus 41% in the previous quarter. With fierce competition from Apple and RIM, and Palm just launching its Pre into Nokia's European stronghold, well, it's a good thing Nokia's branching out into untapped markets like single-core Atom-based netbooks.
Read -- First loss in a decade
Read -- Nokia Q3 statement
Nokia needs to sort themselves out, who cares about a netbook?
The last Nokia I owned was an 8310, even my loyal sister has gone across to a Magic now.
They just need to go back to the wood pulp industry, like they started...
It ain't about the hardware. They can put in 12 MP cameras in their best devices if they want and it isn't going to make a difference except to bring their profit margins down further. Trying to appeal to too many people isn't working out. I'm sure they basically got screwed by the recession, but they need to focus on fewer devices. It must be difficult for a company that size to change direction but that's what happens when a company is only focused on market share. Does Nokia even have a smartphone ecosystem or just a bunch of different smartphones?
@Average White boy,
They have a very established smartphone eco-system.
E-series is the business series: Against Blackberry
N-series is the All-in-one series: Agains Apple and others
5800 XM: Against ipod touch and other similar music oriented smartphones.
It's interesting reading the Yahoo story. It seems like all phone-only manufacturers have reported losses.
So before all the iFanbois jump all over this I wonder if anyone could break out Apples phone business profits and costs to see if they are making money on it. Not app store, just the phone manufacture and selling bit.
It seems like a result of global downturn, but for Nokia exacerbated by poor design (in a US centric view) and general pricing strategy.
What can I say... they got what they deserve.
After selling the Iranian government spying equipment to use against their own people so they could keep their dictatorship alive... you really shouldn't feel the slightest bit sorry for Nokia.
Maybe with the N900? No? Anyone?
Many people see this coming except fanboys. This is not a
one quarter phenomenon. Nokia has been losing market share
quarter after quarter. This quarter shows the shrinkage is
accelerating. Based on this rate, Nokia could become
the next Motorola within a year.
Profits from the devices and services division were EUR 785 million, down from EUR 1,469 last year, but up from EUR 763 million last quarter.
Nokia mobile device volumes were 108.5 million units, down 8% year on year but up 5% sequentially. This is set against estimated industry volumes of of 288 million units, down 7% year on year and up 7% sequentially. Nokia's overall market share was 38%, the same as Q3 2008 and the same as Q2 2009. Year on year market share was higher in Europe, Middle East and Africa, but lower in Greater-China, Asia Pacific and North America.
Not as bad as Engadget makes it out to be. With the E72 and N900 on the way, and a host of X-series device I doubt Nokia will feel too troubled.
Making a loss is making a loss. How is it not as bad as Engadget "makes it out to be"?
It was Network Services that made the biggest loss, excluding that they would have probably still made a profit. Nokia does a lot of things, not just phones.
Yupe. Nokia is big company. Failing we also learn. In life, not everything is peaches and creme.... there is also Brussels sprouts and broccoli you know...
As has been mentioned, the loss is largely due to a 903 million Euro write off on Nokia Siemens Networks.
The handset division did pretty well. Smartphone sales were down from 16.9 million in Q2 to 16.5 million in Q3. This still kicks the crap out of everybody else.
That said, let's not mince words - the N97 has been a disaster (the N97 Mini is evidence enough of that) and Nokia still don't have a realistic competitior to the iPhone 3GS, HTC Hero or even the Palm Pre. The N900 - and more likely the X6 - should change that but Nokia need to either up their game or accept they will rule the mid-tier market whilst ceding the high end market to others.
Yeah, the loss is because of that write-down, which is a one-time nothing. Though I would be concerned over the 41%->35% market share drop in ONE QUARTER. Likely it's because people are delaying their Nokia purchase till new devices come out.
Do you really think Nokia has the brand recognition for people to be waiting for certain Nokia phones? I could see a couple of geeks doing that, but just regular people? I've never met a regular person who was waiting for the next Nokia phone. The iPhone though, yeah, I know a bunch of people who asked whether they should wait before buying one, but not Nokia.
I'm not saying Nokia is a bad or anything, just they don't have that sort of brand recognition, at least not in the U.S.
@Detox: And that "in the US" makes all the difference. There's almost 7 billion people in the world, most of whom aren't in the US. There aren't even any carriers in the US that have offered the major Nokia smartphones(you have to buy them unlocked, which costs upwards of $600) so most people here never see them. In places like Europe and Asia, though, Nokias sell like hotcakes.
That didn't really answer my question. Do people wait for new Nokia phones because of brand recognition? When I used to go to the store to buy a phone, I would look at whatever was available, pick out one that was pretty and seemed to be okay and buy it. This was before phones actually were useful. There was no brand that stood out, except for maybe Blackberries.
I've yet to hear of Nokia addicts.
@Detox
Yes there are, around the world. Where are you from? The US? Perhaps not. But in many countries around the world, Nokia is a huge brand with many fans - even those who just buys S40 (their none-smartphone platform) phones.
I'll take your word for it.
Detox, your "analysis" is cracking me up. Nokia not a well recognized brand? COME AGAIN?
Currently Nokia is the world's fifth most valuable brand and has been that for years according to several research institutes.
http://www.interbrand.com/best_global_brands.aspx
Might be best for you to steer clear of marketing.
I reckon that in the USA the Nokia brand isn't worth as much as many others, but here in Portugal Nokia is THE MOST recognized brand of cellphones. And the same goes for the rest of Europe. And many people wait for that Nokia that is coming out, like what happened when n95 was launched.
Mark Anderson: "Nokia need to either up their game or accept they will rule the mid-tier market whilst ceding the high end market to others."
The problem with that of course will be that with Palm, Apple and others largely competing based on their software as opposed to the hardware, if Nokia can't get a foot hold in the upper end of the market it probably won't be long until the competitors release mid range versions of their phones that have the benefits of their software ecosystems but may cut back on things like the cameras, screen size or whatever.
With touch screens becoming more common theyre only going to get cheaper so Android, WebOS ect could be finding their way onto cheaper handsets in the not so distant future which could spell some level of trouble for Nokia.
@Smigit
Perhaps, however the UI is overblown in terms of importance to the customer. Remember that millions buy Nokia because their UI is an evolution of the UI used by customers for over a decade so if you've been using Nokia's for any length of time it simply isn't an issue.
Plus Nokia's reputation in the mid-tier is phenomenal. People buy them because, well, they're Nokia.
Nokia - if you put the N900 on Verizon or AT&T I will happily help boost sales by at least one device...
Agreed, I'm waiting for a UK carrier to pick it up here. Damn, I knew I shouldn't have renewed an 18-month contract on my E71....
Vodafone and Tmobile have it.
+1
Why would you go AT&T when there's T-Mobile? I suppose if you live somewhere rural that they haven't hit with 3G yet...
My gut feeling is that HTC did most of the damage and not Blackberry nor Apple...
Perhaps. I think the 3GS will have taken a good chunk of that 500k though as one of the areas that declined was Asia Pacific which includes Australia where it's available on many carriers.
That said, Nokia still comfortably beat Apple in Oz in terms of share.
Why are you listing old models from a couple of years ago dumbass?
Nokia has many phones because they create different devices for different market and regions and demographics. That is how they succedd. For us geeks, you will only need to be concerned with a couple of models. You think people on low income in third world would be interested in N900 or E72? Nope. That is why they have 1000, 2000 and 3000 series for them. Nokia caters not only to pretend geeks like you.
Some of the models you listed are not available in all countries, just like cars, TVs and whatever. Look at Acer, Dell and whatever. They have countless of models and sub-models with different codes for even the slightest difference in specifications like RAM amount.
Can anyone name all Nokia phones?
No?
Ok that's their problem .. they have too many damn products.
The should have only 2 or 3 phones for each of 3 budget levels (low end, med, and high)
So in total they should have no more than 9 phones. Ideally only about 5 or 6.
Without Google:
Nokia 5800 Express Music
Nokia 5800 Game Edition with 20 Free games
Nokia X60
Nokia 5200
Nokia E71, E75
Nokia Star Trek Radio Thingy Look Like (so cool)
Nokia N95, 96, 97
Nokia N800, N810
On my opinion, when it comes to merchandise, I like options. I like colors to choose from (black, white, red, green, blue), I like different sizes, different materials> I see Nokia as a Department Store with many many products to meet each customer. The problem in the US is that no carrier ever picks up Nokia's cool phone, but in Europe they do. Ask any European what they think about he N95 and they will give a most likely a positive opinion based on actual use not just a youtube video they watched. Why? Because the phone was subsidized there 100% (Vodafone had it for free) ... So, we are just left puffing and huffing, wishing anyone at home, had the guts to pick a flagship Nokia phone. What is the fear you may ask? I am not sure.
I think all carriers in the UK had it free at some stage. I pay £30/mo on an 18 month contract with Unlimited net and 300 min/sms. It's probably not the best deal, but 3 have the best coverage where I live.
Can you name all Toyota models? Or VW models, including seat skoda RR etc...
A lot of models isn't a problem, as long as you can produce them with profit, and Nokia did produce them with profit. The problem was Nokia Siemens networks with 1.1 billion € loss. Without it they would have made about 700 million € profit.
Next quarter will be intresting, as N900 and X6 hits the stores. The question is will there be enough components, eg touchscreens to keep them going.
I like options as much as the next guy, but certain technology companies need to get a lot better about defining their products. Not only will it make things easier for consumers to find the one that suits them, I'm sure it will ease the burden on their manufacturing and marketing.
Nokia has always had an extremely confusing array of different model names from which it is impossible to discern a feature set, especially as they fragment things so. Having no more than ten models, with features added as you go up the price range, would be a lot clearer.
They're not the worst offender, though. That honour goes to ATI... I still have no effing clue how their Radeon HD numbering works considering some cards with lower numbers than mine are far better, but generally their numbering increments as cards get better.
Try to put these:
Nokia 1101
Nokia 1110
Nokia 1112
Nokia 1200
Nokia 1202/1203
Nokia 1209
Nokia 1600
Nokia 1650
Nokia 1661
Nokia 1680 Classic
Nokia 2320/2330 Classic
Nokia 2600 Classic
Nokia 2626
Nokia 2630
Nokia 2652
Nokia 2680 Slide
Nokia 2760
Nokia 3109/3110 Classic
Nokia 3120 Classic
Nokia 3230
Nokia 3250
Nokia 3600 Slide
Nokia 3720 Classic
Nokia 5030 XpressRadio
Nokia 5130 XpressMusic
Nokia 5140i
Nokia 5220 XpressMusic
Nokia 5300
Nokia 5310 XpressMusic
Nokia 5320 XpressMusic
Nokia 5000
Nokia 5500
Nokia 5530 XpressMusic
Nokia 5610 XpressMusic
Nokia 5630 XpressMusic
Nokia 5700
Nokia 5730 XpressMusic
Nokia 5800 XpressMusic (Tube)
Nokia 6020
Nokia 6021
Nokia 6060
Nokia 6070/6080
Nokia 6085/6086
Nokia 6101
Nokia 6103
Nokia 6110
Nokia 6111
Nokia 6120 Classic
Nokia 6125
Nokia 6131
Nokia 6131
Nokia 6210 Navigator
Nokia 6212 Classic
Nokia 6220 Classic
Nokia 6230i
Nokia 6233
Nokia 6260 Slide
Nokia 6270
Nokia 6280
Nokia 6288
Nokia 6290
Nokia 6300
Nokia 6303
Nokia 6500 classic
Nokia 6500 slide
Nokia 6555
Nokia 6600 Fold
Nokia 6600 Slide
Nokia 6650 Fold
Nokia 6630
Nokia 6630
Nokia 6680
Nokia 6681
Nokia 6700
Nokia 6710 Navigator
Nokia 6720 Classic
Nokia 7070 Prism
Nokia 7100 Supernova
Nokia 7210 Supernova
Nokia 7270
Nokia 7280
Nokia 7310 Supernova
Nokia 7360
Nokia 7370
Nokia 7373
Nokia 7380
Nokia 7390
Nokia 7500 Prism
Nokia 7510 Supernova
Nokia 7900 Prism/Crystal Prism
Nokia 7610 Supernova
Nokia 7710
Nokia 8600 Luna
Nokia 8800
Nokia 8800 Sirocco Edition
Nokia 8800 Arte/Sapphire Arte
Nokia 8800 Carbon Arte
Nokia 9300
Nokia E50
Nokia E51
Nokia E52
Nokia E55
Nokia E60
Nokia E63
Nokia E65
Nokia E66
Nokia E70
Nokia E71
Nokia E72
Nokia E75
Nokia E90
Nokia N70
Nokia N71
Nokia N73
Nokia N76
Nokia N78
Nokia N79
Nokia N80
Nokia N81
Nokia N81 8Гб
Nokia N82
Nokia N85
Nokia N86
Nokia N800
Nokia N90
Nokia N900
Nokia N91
Nokia N91 8Gb
Nokia N93
Nokia N93i
Nokia N95
Nokia N95 8Gb
Nokia N96
Nokia N97
Nokia N97 Mini
Nokia X3
Nokia X6
and these:
Nokia 1100
Nokia 2100
Nokia 2300
Nokia 2600
Nokia 2650
Nokia 3100
Nokia 3200
Nokia 3220
Nokia 3300
Nokia 3310
Nokia 3330
Nokia 3410
Nokia 3510
Nokia 3510i
Nokia 3650
Nokia 3660
Nokia 5100
Nokia 5140
Nokia 5210
Nokia 5320 XpressMusic
Nokia 5510
Nokia 6100
Nokia 6108
Nokia 6170
Nokia 6210
Nokia 6220
Nokia 6230
Nokia 6250
Nokia 6260
Nokia 6310
Nokia 6310i
Nokia 6510
Nokia 6600
Nokia 6610
Nokia 6610i
Nokia 6650
Nokia 6670
Nokia 6800
Nokia 7200
Nokia 7210
Nokia 7250
Nokia 7260
Nokia 7610
Nokia 7650
Nokia 8210
Nokia 8310
Nokia 8910
Nokia 8910i
Nokia 9210
into 9 phone models. I'd love to see that.
List of reviews stolen from here:
http://www.mobile-review.com/review.shtml
Your right! that is their problem!! nokia have too many phones so when the public go to buy a nokia phone they see a large selection from nokia and think "hrmm there are too many here. I will go and buy a phone from another company instead!"
That list has really many old models. Some of them are a decade old.
Its pretty easy to divide Nokia phones to groups if you look at the system
1xxx Extremely cheap phones
2xxx Dirt cheap phones
3xxx Budget phones
5xxx Sport, music, for yougsters phones
6xxx For people over puberty
7xxx Designer phones
8xxx luxury phones
9xxx Communicators
Exx Busines phones
Nxx Top of the line
Nxxx Anything with linux
The numbering is more about the customers than device properties. It might look confising if you look at properties but its quite logical if you look at it as a customer type.
There's no easy way to make a logical numbering scheme with device properties if you keep in mind how many phone models Nokia releases. Any logical scheme by the device properties will fail after a few years no matter how well thought out with that many models. Even this system has forced Nokia to start to reuse numbers from the 90s. 20 years of new models eats a lot of numbers
Nokia's models all make sense, i wish nvidia and ATI has a modeling scheme that make sense like nokia; you stop following the graphic card market for half a year you are completely lost. Most people that think Nokia's product line is confusing are from the US, and really its not your fault since you don't get all the nokia phones at all (seems like most nokia models available in the US are their budget ones), people from Europe or Asia has gotten used to Nokia numberings a long time ago so its not confusing at all, also because the Nokia product line naming scheme haven't changed in years, except the addition of the N series and E series.
I read an article from an analyst suggesting that Nokia was looking into buying out Palm. Interesting if it were to happen because it could give Nokia a huge jump forward in terms of their touchscreen smartphone products—an area where Nokia is seriously behind the competition. Imagine the power and beauty of WebOS with the investment potential of a company like Nokia.
Right.
Gonna spend $5+ billion dollars for a device with a proprietary OS that didn't meet expectations.
Nokia's gonna do that, alrightee!
Palm is not a device. WebOS was not received poorly—perhaps the hardware—but there was universal praise for such a new mobile OS.
And explain to me why Nokia would be so shy with acquiring a proprietary OS when they were sticking with their closed (but recently open-sourced) S60 for such a long time?
I hope they do. As an Apple shareholder and consumer, I have always felt a little like I've been cheating, with my Palm holding (I couldn't resist buying some when the stock was noodling around in the single digits -- hey, money is money!). While it's already up quite nicely since I bought the stock, it will be nice to get a further premium and get rid of it so that I feel less conflicted!
Those analysts were spreading manipulated market rumors to increase the share prices of Palm.
I agree with Ineed911 up there, Big Red can do wonders for you, assuming you have a phone verizon will allow :P
Didn't do THAT much for the Storm. Sure they had a huge launch party but the love fizzled pretty quick. VZW has a huge reach in the US but you still need a decent phone with a great OS to be successful. Maybe the Storm2 will prove your theory.
Nokia at this moment seems to be a sinking ship, they should have ditched the S60 platform ages ago. However it's not too late, they need the Maemo OS to be a major success, otherwise they're facing a bleaker outlook come next quarter
And why should they? S60 is a wonderful platform for small mid-range devices. I have been using one for a couple of years (previously a PalmOS and WinMob user) and it is a brilliant platform designed for one-handed ease of use.
@ KIFF you might love S60, but from the look of Nokia's latest numbers a lot of people don't seem to agree.