Nokia cuts revenue projections again
NOKIA, the world's biggest maker of mobile phones, cut its outlook for sales and profits, hurt by competition from Apple's iPhone and devices based on Google 's Android software.
Second-quarter handset revenue and margins will be "at the lower end of or slightly below" its earlier forecast range of 9pc to 12pc, the Finnish company said in a statement. Nokia cut its outlook for 2010 for the second time this year.
"This does not help in restoring investor confidence and credibility of the management," Sami Sarkamies, an analyst at Nordea Bank in Helsinki, wrote in a note to clients. "Chosen strategy, and more importantly its implementation, will be questioned."
Nokia CEO Olli-Pekka Kallasvuo has struggled to deliver a touchscreen model that meets user expectations raised by the iPhone.
The N8, Nokia's newest touchscreen smartphone, is scheduled to be released in the third quarter. The device has been too slow in the making and may still disappoint, analysts have said.
"Somehow they've lost the sense of understanding of where the market is going," said Bengt Nordstrom, an analyst at Northstream in Stockholm. "There was a time when Nokia dictated for the industry how a mobile phone should look and function."
Now, they have strong competition from other players, particularly from Apple.
The company's N series, with its most expensive touchscreens, has been "disappointing" while the ramp-up of the X series music phones was "somewhat challenging," he said.
While Nokia is losing high-end, high-margin customers to the iPhone, BlackBerry, and Android software devices, it is also facing mounting competition in the low-end market from cheaper products from Chinese and other manufacturers.
Competition at the low end is "very tough" and the third quarter "will continue to be challenging," Mr Ihamuotila said, without giving specific guidance. (Bloomberg)