Beleaguered Nokia cuts outlook, shares plummet

Nokia shares fell 14.39% on the NASDAQ today after the company lowered outlook.

“Nokia Corp. warned Tuesday that it might not book a profit in its core business this quarter, as the world’s largest mobile-phone maker comes under intense pressure at both the high and low ends of its lineup,” Arild Moen reports for The Wall Street Journal.

“The Finland-based company faces tough competition from rivals such as Apple Inc. and Google Inc.,whose phones and operating platforms have proved more popular than Nokia’s,especially in the lucrative smartphone market,” Moen reports. “But Tuesday’s profit warning suggested that Nokia’s problems aren’t just limited to the smartphone market,as it said it was struggling to fight a shift in demand toward lower-priced,lower-margin handsets in Europe and China,where it also suffered from poor management.”

“The company said net sales at its devices and services division would come in substantially below the €6.1 billion to €6.6 billion it had forecast for the second quarter this year. Nokia had expected its devices and services division to post an operating margin of 6% to 9%,” Moen reports. “The results point to a rapid deterioration of Nokia’s business and put more pressure on Mr. Elop to defend the company’s market as he shifts to a new strategy built around phones powered by Microsoft Corp.’s mobile operating system.”

Moen reports, “Tuesday’s warning sent shares in Nokia tumbling in Europe. The stock fell 18% to close at €4.75 in Helsinki.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “GetMeOnTop” for the heads up.]

Related articles:
Beleaguered Nokia to shed 7,000 employees – April 27, 2011
Apple overtakes Nokia as world’s largest vendor of mobile handsets by revenue – April 21, 2011
Microsoft’s Windows Phone ’07 U.S. launch was a dud; Nokia worried? – April 12, 2011
Apple makes roadkill of deer-in-the-headlights CEOs – April 1, 2011
Microsoft to pay Nokia over $1 billion to use Windows Phone ’07 – March 7, 2011
Analysts not impressed with Nokia’s incoming CEO Elop – September 10, 2010

39 Comments

  1. The death spiral continues. In years past I bore Nokia no ill will. It was just one of those brands whose products made sense to some but not to me. Now it’s like applying leeches to a dying patient, the Microsoft cure is worse than the disease and will likely be the death of them.

  2. “Microsoft” and “Windows” are branding poison (especially in Europe). If Nokia can’t even make a profit from it’s low-end phone business, they are truly doomed.

    1. Yep, you’re so right. The problem is the competition in the low-end global phone market is so brutal, even Samsung and LG (for current market leaders ) have to fiercely defend their low-end phone global market share to the China cell phone maker such as ZTE and Huawei, and not to mention the hundreds of China home industries of “you-can-brand-your-own-phone” makers. Sony-Ericsson and Nokia are losing this battle. Yep, it is very interesting to see where Nokia (and also RIM) could place its phone in the global product map.

    1. …and how have Obama’s policies resulted in the managerial, technological and fiscal incompetence of a FINNISH (versus finished) company.

      While I may disagree with many of Mr. Obama’s policies, I think this blind willingness to blame him for anything is crazy.

      NOTE: Obama was born in the USA, he is NOT a communist/socialist/fascist/Jedi Knight. However, I do think that his fiscal policies, in some but not all, areas is flawed. Democracy in action…

        1. Congrats, Roberto. You caught yourself a mess of “Now, Now, …” with your trolling. But it’s got mad cow disease, so you better throw it back and try again.

            1. Roberto, take your political rhetoric to the appropriate chat room (where corporate executives go to cry over their cash hordes and commiserate the result of 5 DECADES of deficit spending).

      1. I’ll leave Nokia out of the equation and just say, “What does Obama have to do with the United States not making a profit?”

        In fact, forget Nokia, can we see how Catepillar is doing? I remember Obama, along side with Catepillars CEO, touting how his stimulus will be of great benefit to them. I don’t see the two of them chumming around anymore.

        Is it true the housing market is entering a double dip recession for that industry?

        Oh, and don’t cop out by blaming Bush for everything… That ship has sailed long ago! And this blind willingness to blame him for everything is even crazier. Time for Obama to put on his big boy pants.

        1. That’s right! Still blaming Bush for things is unreal. I mean 3 years later, there’s no way any policies of his are still having any effect on anything. So, Bush’s presidency is way to long ago to be used as a scapegoat for Obama, but if you’re gonna blame anyone for bad things happening today, and for that matter during Bush’s presidency, it should be Clinton. Right?

  3. I can’t wait to see the eventual release of Nokia phones powered by “Microsoft Windows Phone Ultimate Edition With Skype Inside”, which will surely save them.

    Or perhaps not.

    1. Thats not what I heard. It’s suppose to be “Microsoft Mango Ultimate Fruity Edition with Skype Optional Mandatory Installation Edition” that will save them.

  4. Nokia/Windoze will do best if they forget trying to compete with the iPhone and Android, and target smartphone newbies, the site impaired and old people with a LARGE PRINT large button phone that doesn’t do too much.

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