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Eurobites: Nokia Sales to Hit $26.5B in 2016 – Analyst

Paul Rainford
4/20/2016
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Also in today's EMEA roundup: EU objects to Android; Swisscom touts mobile broadband breakthrough; Finnish smartphones ready to ship again.

  • Its recent takeover of former rival Alcatel-Lucent (NYSE: ALU) will not help Nokia Corp. (NYSE: NOK) to close the revenue gap with Sweden's Ericsson AB (Nasdaq: ERIC) as much as investors may have hoped, according to a new forecast from analyst firm MKM Partners . In a research note distributed earlier today, MKM Partners analyst Michael Genovese estimated that Nokia's sales will hit €23.22 billion ($26.5 billion, at today's exchange rate) this year and remain flat in 2017. The 2016 forecast is 12% lower than earlier predictions from the company, which notes significant overlaps between wireless access products and a weak market outlook. Genovese also points out that "competitors will aggressively target Nokia during the merger integration process." Ericsson looks set to generate about $30.5 billion in revenues this year, while sales at Huawei Technologies Co. Ltd. 's communications service provider (CSP) business are expected to hit $41.7 billion, according to the company's own forecasts (see chart below). (See Finn de Siècle for Alcatel-Lucent, Huawei's Carrier Division Set to Dwarf Ericsson by 2018 and Huawei: New King of the CSP Market.)

    Historical Revenues and Sales Forecasts ($B)
    Note: Historical data in this chart is based on year-average exchange rates; in local currency units, Ericsson reported slight growth between 2011 and 2015.  Source: Companies, Light Reading.
    Note: Historical data in this chart is based on year-average exchange rates; in local currency units, Ericsson reported slight growth between 2011 and 2015.
    Source: Companies, Light Reading.

  • The European Union once more has the knives out for Google (Nasdaq: GOOG), this time charging the search giant with abusing its dominant position specifically in relation to its Android operating system, reports Reuters. In an unequivocal statement, Competition Commissioner Margrethe Vestager said: "Based on our investigation thus far, we believe that Google's behavior denies consumers a wider choice of mobile apps and services and stands in the way of innovation by other players, in breach of EU antitrust rules." The European Commission has sent Google and its parent company Alphabet Inc. an official Statement of Objections, setting out in detail its various beefs. (See Eurobites: Google Denies EU Charges.)

  • Swisscom AG (NYSE: SCM) is claiming a European first by this week achieving a data transfer rate of 1 Gbit/s in tests, conducted with Ericsson AB (Nasdaq: ERIC), over its mobile broadband network. Swisscom's mobile broadband network reaches over 98% of the population with 4G.

  • Nokia's subsea subsidiary, ASN, is to upgrade two of its cable systems, one connecting major cities along the West Coast of the US and the other linking the UK with the US under the Atlantic Ocean. ASN will be using its Softnode technology on both upgrades.

  • The former Nokia plant in Salo, Finland is about to start shipping crowdfunded smartphones made by Robotic Industries. The handsets, which are being promoted as super-strong and ultra-secure, will run on the Sailfish operating system, developed by Jolla , a Finnish company itself set up by former Nokia employees. (See Eurobites: Jolla Sails Into Choppy Waters.)

    — Paul Rainford, Assistant Editor, Europe, Light Reading

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