mobileu.co.uk

Disappointing profit report from Nokia

Nokia has reported lower than expected profits for the first quarter of 2010, leading the firm to blame the results on the challenging economic climate as well as strong competition from high-end competitor handsets.

The results, while not disastrous, are likely to be disappointing for the handset manufacturer. Net sales for the quarter were at €9.5 billion, three per cent up on the same period last year. Operating profits increased to €488 million, well up on the €55 million of 2009's first quarter. But these results were not sufficient for investors, and share prices in Nokia fell by more than 12 per cent in response.

Olli-Pekka Kallasvuo, the chief executive of Nokia, said: "We continue to face tough competition with respect to the high-end of our mobile device portfolio, as well as challenging market conditions on the infrastructure side."

One of problems faced by Nokia is that competing smartphone manufacturers are trying to appeal to different target markets. For example, Apple is no longer targeting its iPhone solely at Apple fans and early adopters. The company has brought its prices down so that their smartphone is more of a mass market proposition now, making it far more difficult for Nokia to compete.