Nokia's Profit Drops, Faces Need to Change Faster

From PC World: Nokia reported an increase in sales for the fourth quarter, but profit declined as the company continues to struggle in the high-end smartphone segment.

Sales for the quarter totalled €12.7 billion (US$17.4 billion as of Dec. 31, the last day of the period reported), up 6 percent compared to a year earlier, helped by favorable exchange rates. However, year-on-year, net profit dropped from €948 million to €745 million.

The company sold 123.7 million units in the fourth quarter of 2010, down 3 percent year-on-year. Nokia was affected by the intensely competitive mobile phone environment as well as certain component shortages, which it also said negatively affected sales in the third quarter. That resulted in Nokia's market share falling to 31 percent, compared to 35 percent a year ago, according to Nokia's estimates.

In addition, the average sale price for its smartphones declined.

The volume of smartphone shipments increased 36 percent to 28.3 million units during the last three months of last year. Nokia sold 5 million units of its Symbian 3-based N8, C7 and C6-01 smartphones, Nokia CEO Stephen Elop said during a conference call. But the overall market is growing faster. Nokia said its smartphone market share, year-on-year, dropped from 40 percent to 31 percent.

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