Nokia shares slammed in wake of miss; Nokia CEO calls Apple iPhone ‘niche product’

“Shares of Nokia Corp. fell as much as 10% Thursday after the world’s largest maker of mobile phones reported a smaller-than-expected 25% increase in first-quarter profit and forecast the mobile-phone market to shrink in euro terms this year,” Aude Lagorce reports for Dow Jones.

“Nokia’s net profit in the three months ended March 31 improved to 1.22 billion euros, or 0.32 euro a share, from 979 million euros, or 0.25 euro a share, earned in the year-ago first quarter. The profit missed consensus forecasts calling for earnings of 1.38 billion euros, according to a survey of 29 analysts conducted by FactSet,” Lagorce reports.

“Excluding one-time costs for pensions and the closure of a plant, the latest quarter’s earnings came in at 0.38 euro a share. Sales rose 28% to 12.7 billion euros, in line with expectations,” Lagorce reports. “Nokia’s shares were last down 10% in early afternoon trading in Helsinki.”

“Analysts at Citigroup recently expressed concern about a lack of major products in the second quarter. The company has said it won’t launch a touch-screen riposte to Apple Inc. and its high-end iPhone until the second half of the year, and it’s yet to give a firm date,” Lagorce reports. “Nokia Chief Executive Olli-Pekka Kallasvuo on Thursday brushed off suggestions that Nokia needs to do more to fight back the foray of iPhone onto its home turf, calling it a ‘niche product.'”

Full article here.

MacDailyNews Take: Kallasvuo is either incapable of applying the lessons of iPod to iPhone and understanding what’s coming his way or, much more likely, he understands perfectly and, since he has no answer, is saying just what many now-defunct (if they aren’t making iPod accessories) MP3-makers said a few years ago. How many “niche” products have $100 million venture capital funds ready and waiting, exactly? Candybars and way-too-late, fake 1st generation iPhones with craptastic UI’s aren’t going to cut it from here on out, Nokia boy. This June, the bloodbath really begins, and Kallasvuo sounds like he knows it.

78 Comments

  1. This is the first set of posts on MDN that have finally dared to question the MDN take, amen!

    also i notice on this site a lot of US market this and US market that with regard to computer market share and growth, whilst its nice having market share in the US, the growth markets are China and India where they have 2 billion population total to the US 260 million.

    How are apple doing there? whats the growth like?

    and also if the growth in China and India is largely restricted to lower cost units than the Mac then Apple are actually positioned quite poorly dont you think with a softening US market and a rampant asian one?

  2. @mac+ (and Nokia)

    It is all nice and well to dismiss the iPhone by using “niche product” as a pejorative adjective, but going for the mass market may sell lots of units yet not making any PROFIT, which should be the goal of any business. Look at how well Motorola did by focusing on phones cheap enough that carriers would give them away.

    Also take into account brand positioning and brand psychology. Apple is a premium product commanding premium pricing. The brand (and the company and stock, by extension) would be devalued if Apple products were giveaways for the phone companies.

    If your product costs $0, then the eventual perceived value of your products by customers is $0.

    I think SJ is taking the right path here by trying to change the market dynamics in the cell industry. The value of Apple’s unique hardware should be what drives people to spend money on the iPhone. It is not a commodity.

    The phone service is what consumers should consider interchangeable and a commodity.

  3. Communism mentioned AGAIN. It can only mean that people are tiring of the abuses of Capitalism.

    Well hard luck, slaves, you are f**ked by any system, Cap. or Comm. where you think one vote every four years is somehow ‘democratic’.
    ‘But they hate our freedom’ LOL! Yeah right, freedom to be abused by the Boss. Read Animal Farm, idiots.

    As for the iPhone, it is easily the best product of its type out there.
    All consumers love it, but not all can afford it or want to change carriers.
    There are no ‘comparable’ products, and there wont be.
    There are phones, and there is iPhone.

    if you dont like what Apple is doing with it, buy a huge block of Apple shares and vote Steve Jobs off the board.

    Good luck.

  4. He’s right … the iPhone is a niche product – for people willing to spend hundreds for a phone, for people willing to either live with AT&T or deal with a liberated phone, for people who need (or WANT) the extra features. As kenh said, the world is made up of niches. Apple has clearly defined the niches it wants to operate in – even if the market (we the consumers as well as many analysts) don’t understand this. Nokia wants to ship many versions aimed at many niches, and it wants to then snipe at Apple’s single product for being aimed at a single niche? Apple isn’t going after “the cell phone market”, just the top end of it. And it seems to be doing it quite nicely, thank you. Will June bring “a bloodbath”? Not hardly likely. Apple will just be widening the niche a tad and making it easier to decide on their product, rather than staying with what you have.

    1. OPK is a fucking idiot and has completely ruined Nokia. That man should be shot before he is put in charge for another big company.

      OPK puts his amazing mind at the task at hand and as per usual the dufus comes up with the wrong conclusion!

      Niche product eh ?

  5. @ Rahrens

    What mistakes??? Look man this is obvious, they’ve completely missed the opportunity to become a major player in the PC world. They left it to Bill Gates, Dell, etc… and I’m not asking about Apple to all of a sudden ship cheap products!!! I’m just asking them to be a little bit more affordable and a little bit more open!!! This doesn’t mean becoming the McDonald of the computing world. iPhone could be sold tomorrow morning unlocked worldwide for about $50 to $100 less!!!

    Apple is definitely missing the boat here. Viktor is right, and Crazylegs too… This Businees Week article will convince you all: http://www.businessweek.com/magazine/content/08_17/b4081000500950.htm

    1. @Mac+

      If Apple listened to you they would not be the second largest corporation and holding over 80 billion in cash.

      But by your way of thinking Apple needs to be cheaper and more open supposedly like the other guys, funny. I don’t see the others do so well as Apple.

      Like I said before, Your way off in left field Cheif, Apple is open enough to show they are the leader, you can’t say that about the others that push the “Be OPEN” B.S slang, it means nothing at all.

      And how is it that others are struggling to make thin computers and tablets to compete with Apple on price But can’t.

      And yet with all you say Apple has 80 Billion in cash and is the second largest Corp, you missed the boat.

      Everything you said is not true, but you are funny.

  6. @critic,

    Again, being more open and more affordable doesn’t mean becoming Michael Dell!!!!!!!!! It’s not all black or white!!!!!!!!! Apple could really do a better job worldwide in general…

  7. @His Shadow
    “Just how much money is enough for investors?”

    I agree 100%. It’s absurd when the news reports that ‘Company A’ has “only” made a profit of £200m and therefore will be laying people off in an effort to boost earnings.

    This capitalist system is being milked for all it’s worth by the bastard fat cats who sit at the top of these companies.

  8. I simply have to laugh at the posters who whine about Apple’s “failure” to make the iPhone readily available globally. What are you smoking! The reason that Apple’s model works so well is that it does not make rushed stupid deals that are sure to destroy its business model down the road.

  9. Missed the opportunity to be a major player in the PC world?

    WTF!? They ARE a major player in the PC world!

    You mean they arent Dell? Correct, but then Dell will be gone in 5 years, and is worth 1/3 of Apple.

    You mean they arent Micro$hit? No they dont make a CRAP OS.

    You want Apple to sell a cheap ‘headless’ Mac, and still make money. Impossible.
    You want them to license their OS so it runs on garbage PC’s? Forget it.

    THERE IS NOTHING WRONG WITH APPLE. OK?

    Go buy a Windows machine and be happy.

  10. If Apple was run by these people that post on internet forums, they would have been put out of business a long time ago. Luckily, Steve Jobs knows what he’s doing and he doesn’t follow the advise of these amateur armchair quarterbacks.

  11. @ LinuxGuyAndMacProdigalSon

    Apple business model sucks!!!!!!! The only reason Mac are selling more is because Windows is running on them. Apple should learn is lesson and stop trying to close down and control the all world. iPhone could sell like hot cakes tomorrow morning and not for a lot a $$$ less…

  12. “They ARE a major player in the PC world!”

    NOPS!!!!!!!!!!! They INN-O-VA-TE and that’s it. In three years, Microsoft will be taking advantage of multi-touch technology and sell a lot more than Apple. History will repeat itself as long as Mr Jobs doesn’ embrace the open mentality of the world we’re living in.

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