So let’s just take a step back. Nokia has been making mobile phones since the mid-1980s. It invented the category in 1996 with the Nokia 9000 Communicator. The first iPhone was released on June 29, 2007. At the time, the biggest smartphone player in the world was Nokia. But in just over four years Apple has taken the mobile world by storm, Google has entered the market with the Android OS and now Nokia is feeling the pain, on the bottom line, to put it mildly. And a new iPhone is on its way – will it tip Nokia into terminal decline?
Nokia has reported an operating loss of €487 million for the quarter. It made an operating profit of €295 million a year ago for the same quarter, so that’s a €782 million drop. Or, shall we say, a screaming dive.
Sales were down by 7% over the last year to €9.275 billion on 11% compared to last quarter. Earnings per share were down by 45 percent to €0.06, a 54% drop from last quarter. Last year Nokia had almost €1 billion in net cash. It now has a debt of €176 million.
All of its prdoucts, whether smartphone, feature phone or basic handset have declined in sales, especially the smartphone.
Sales of smart devices dropped 33 percent, to €2.368 billion from €3.503 billion a year ago, or a 34% decline in volume to 16.7 million units.
The trouble with all this of course is that while CEO Stephen Elop says its Windows Phone plans will rescue the company in the long term, by the time that long term arrives, the pummelling from iPhone and Android devices will only have gotten worse.
Meanwhile Apple’s iPhone is booming, if the rumours are true, Apple will enter the lower end of the market with a cheaper version. That could spell devastation for Nokia.
Mobile guru Tomi T Ahonen is calling all this the toppling of a king. Analyst Benedict Evans notes that “Nokia is being killed” by Apple and Android at the high end, with Android at the $100-200 point and the Chinese and Indian handsets at $10-$50.
Symbian has been cut adrift. Windows Phone products are still not out. So Nokia needs to get an awesome product out and fast. The Nokia N9, running Meego, is actually very good, but it’s not even on sale yet.
The silver lining? Mapping division Navteq and Nokia Siemens Networks grew. Hooray.