Nokia may be the world’s largest mobile phone maker, but it has a serious weakness. Nokia’s key markets tend to be emerging. That’s why Nokia’s handset line is skewed heavily toward lower-end handsets. To further complicate the situation is Nokia’s lack of standing in the smartphone sector.
The result? A falling average selling price for a Nokia handset. This morning in Helsinki, Finland, Nokia reported in its fourth quarter earnings call that the ASP for a Nokia phone was 71 euros. That’s a 14 percent drop from a year ago when the ASP was 83 euros and a 1 percent drop from the third quarter.
With meager ASP’s, it didn’t matter that the company shipped 113 million handsets in the fourth quarter (down 15 percent from 2007 Q4). Its net profits of 576 million euros (US$743.62 million) on sales of 12.7 billion euros (US$16.4 billion) was a 69 percent drop from a year ago.
By contrast, 2007’s Q4 produced profits of 1.84 billion on sales of 15.8 billion euros. Its global market share heading into 2008 was 40 percent. Now it’s sitting at 37 percent.
Nokia’s chief executive Olli-Pekka Kallasvuo doesn’t have high hopes for 2009 either. He expects mobile device shipments to drop 10 percent this year.
via nyt
