Nokia profits hit major slide in second quarter

Monster handset and equipment vendor Nokia continued the gloomy economic theme on Thursday, as second quarter net profit slid to €287m, from €1bn in the same period last year.

Net sales were down 25 per cent year on year to €9.9bn, but global handset sales perked up slightly, with Nokia’s handset market share climbing one per cent sequentially to 38 per cent. Although this is still down from 40 per cent market share in the second quarter of 2008.

The Finnish vendor shifted 103.2 million mobile devices during the three month period, down 15 per cent year on year and up 11 per cent sequentially. This is against estimated industry mobile device volumes of 268 million units, down 12 per cent year on year and up five per cent sequentially.

The average selling price (ASP) of Nokia mobile devices continued to fall, from €65 in the first quarter 2009, to €62 in the second quarter.

The Finn said it expects industry mobile device volumes in the third quarter to be flat compared to the second period, and expects its mobile device market share to remain the same. The company expects 2009 industry mobile device volumes to decline approximately 10 per cent from 2008 levels.

On the infrastructure side, Nokia Siemens Networks reported a 21 per cent year on year decline in net sales to €3.2bn, and the kit vendor said it expects the mobile infrastructure and fixed infrastructure and related services market to decline approximately 10 per cent in Euro terms in 2009, from 2008 levels as carriers reign in spending.

“Nokia put in a solid performance in what was another tough quarter. We increased our share of the global mobile device market sequentially to an estimated 38 per cent and grew our smartphone market share to an estimated 41 per cent. As a result of strong operational execution, underlying operating margins improved sequentially in all segments. Competition remains intense, but demand in the overall mobile device market appears to be bottoming out,” said Nokia CEO, Olli-Pekka Kallasvuo.

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