Clouds gather for Nokia as profits slide and market share crumbles

Clouds gather for Nokia as profits slide and market share crumbles

The latest quarterly earnings reports are in, and it's not good news for everyone's favourite Finnish phone maker: Nokia's profits have taken a tumble, and its smartphone market share is eroding steadily.

Figures for the three months ending in December show Nokia to have stuck €745 million in its back pocket – certainly not bad for the likes of you and me, but less impressive considering a year ago the figure was €950 million, and that was still with the big financial downturn of 2008 fresh in our minds.

Sales, on the other hand, did improve, with Nokia raking in €12.6bn over the three months, a modest 6% improvement.

Put the two together, though, and it's clear that Nokia is cutting its margins to keep sales ticking over, and increasingly relying on its strength in selling cheaper handsets which yield less profit to begin with.

Smartphone unit sales back that theory up. While Nokia can point to a seemingly healthy rise in sales from 20.8 million smartphones sold in the last quarter of 2009 to 28.3 a year later, that has to be seen in the light of the far greater overall growth in the smartphone market in general over the past 12 months.

Nokia now estimates its share of the smartphone market to be 31%, probably the lowest figure since smartphones first emerged into the mainstream and the Nokia N95 was sweeping all before it.

How badly Nokia now needs the N9 to do the same...

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