Nokia's Mixed Call

The world's number one handset maker Nokia Corp. (NYSE: NOK) saw phone sales drop 14 percent year-on-year from $1.47 billion to $1.27 billion in the first quarter of 2007. Recently launched music and gaming phones helped the Finish vendor pick up the slack, however, as it reported a 28 percent profits increase from the sale of converged devices.

Overall, the vendor announced a revenue increase of 4 percent for the first quarter of 2007 to $13.45 billion. Profits, however, dropped 7 percent from $1.86 billion to $1.72 billion.

In common with struggling rival Motorola Inc. (NYSE: MOT), Nokia is feeling the pinch because of pressure on the sales prices of its mobile phones. Analysts at Prudential Securities say that the firm has an average sales price per handset of $89, in line with expectations, but declining as per industry trends. (See Motorola's Handset Headache.)

Nokia's overall handset market share remained flat at 36 percent, which the company predicts will continue into the second quarter. It is, however, expecting some growth in 2007.

Nokia unveiled a new phone today. The Nokia 6120 "Classic" runs on HSDPA 3G (High Speed Downlink Packet Access) networks and has two cameras -- one in front and one in back -- so that it can be used as a video phone when making calls.

Nokia also poured some cold water on Palm Inc. rumors when asked about what kind of acquisitions it might be planning. "I think the acquisitions have been rather on the software and Internet technology side than on the hardware side," CEO Olli-Pekka Kallasvuo said on the question-and-answer session. (See Palm Thursday: No Deal Yet.)

— Dan Jones, Site Editor, Unstrung

Be the first to post a comment regarding this story.
Sign In