Nokia profits fall

Posted on 22 Jul 2010 by The Manufacturer

Finnish mobile phone maker Nokia reported today that its profits have fallen 40 per cent over the last three months compared with the second quarter of 2009.

The firm said its underlying profits were down 27 per cent as it cut the cost of handsets, presumably in an attempt to compete with other smart phones like the iPhone and Blackberry. Its sales were actually up slightly to £10bn – one per cent rise – but profits fell to £223m.

Nokia CEO Olli-Pekka Kallasvuo said the company had cause to be upbeat.

“Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future,” he said. “For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our Mobile Phones business, helped by an improving line-up of affordable models.

“In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fightback at the higher end of the market.”

Kallasvuo’s personal prospects might not be as positive, with the Wall Street Journal reporting that the company is looking to replace him in a bid to halt its declining fortunes.