Mobile phones sales to decrease in 2009 Recession hits Nokia
Olli-Pekka Kallasvuo
The world’s largest mobile phone manufacturer Nokia is not recession proof, after all. Earlier Nokia has been able withstand large economic slumps almost without a sratch, but Friday it issued a warning of diminishing shipments, sales and profitability.
However, Nokia believes that it will come out of the recession in better shape that its competitors and it will strengthen its market share.
Nokia’s rather scant press release is below:
Espoo, Finland - Nokia today commented on market conditions impacting its business as well as updated its fourth quarter 2008 outlook and gave a preliminary outlook for the full year 2009. In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending. The weaker consumer spending has impacted many industries, including the global mobile device market. The mobile device market has also been negatively impacted by the more limited availability of credit, which has limited the purchasing ability of some of our trade customers.
Updated Outlook for the Fourth Quarter 2008:
As a result of the rapid change in global consumer spending, which has impacted the mobile device market, Nokia now expects that the industry mobile device volumes will be lower in the fourth quarter 2008 than previously expected. We now estimate fourth quarter 2008 industry mobile device volumes will be approximately 330 million. This is sequentially up from the estimated 310 million in the third quarter of 2008. This would result in a current estimate of industry mobile volume of 1.24 billion in 2008, instead of the earlier estimated 1.26 billion units, up from 1.14 billion units Nokia estimated for 2007.
Nokia continues to expect its mobile device market share in the fourth quarter 2008 to be at the same level or slightly up, sequentially. This expectation is based on our current view, external market data and the overall competitiveness of our device portfolio.
Nokia expects that Devices & Services sales and profitability in the fourth quarter 2008 will be negatively impacted, due to the aforementioned factors.
Preliminary Industry Outlook for 2009:
Nokia's preliminary estimate is that the industry mobile device volumes will be down in 2009 compared to 2008, impacted by the continuing overall economic slowdown.
Nokia and Nokia Siemens Networks preliminary estimate is that the mobile infrastructure and fixed infrastructure and related services market will be down in euro terms in 2009 compared to 2008.
Actions to Address the Challenging Market Environment:
In addition to the measures recently announced at Nokia and Nokia Siemens Networks, Nokia is taking decisive action to significantly reduce its cost base:
Nokia has already instituted various cost saving actions.
Nokia will curtail use of external contractors, consultants and professional services.
Nokia will further cut operating expenses in 2009 to respond appropriately to the market conditions.
"Nokia believes that its advantages of scale, leading brand, superior logistics, low cost and broad product portfolio are competitive advantages that will enable us to distinguish ourselves from the competition in a challenging 2009," said Olli-Pekka Kallasvuo, Nokia CEO.
Nokia will provide more details on its 2009 estimates and cost saving actions at its Capital Markets Day on December 4, 2008 in New York. Nokia plans to report its Q4 and full year 2008 results on January 22, 2009.
Related News
- Nokia copes with times, fulfills expectations (16 Oct 2008)
- Nokia completes its acquisition of Navteq (14 Jul 2008)
- Nokia to acquire all of Symbian (24 Jun 2008)
- A new third quarter record for Nokia (18 Oct 2007)
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17:55
pfcnpfcn said:
SCENARIO FOR NOKIA AS A MPS SBN MEMBER
PFCN is the nom-de-plume of Brian Keedwell (Integrated Marketing). PFCN is an acronym for Profitable Fulfillment of Customer Needs.
This comment is in the same spirit as my comments to the 2 November MobileMonday article entitled Mobile networks to run out of affordable bandwidth
Comments address Enterprise Mobility in which the goal of device customers is to conduct their event-driven mobile processes with optimized EFFECTIVENESS, Effectiveness = f(Q,P) where Q is Quality and P is productivity.
If mobile device providers (MDPs), such as Nokia, are to escape the plight rapidly befalling network service providers (NSPs), then it's time to become a MPS (mobile process service) SBN (smart business network) member - instead of being a commodity device provider vulnerable to copy-cat cost competition. MDPs would thus become the source of devices that are integral components of MPS.
MPS would be sold on a VALUE, rather than COST, basis (sources of value being associated with mobile process Quality and Productivity). The proposed SBN organization structure keeps the parasites from the door that might be able to copy an engineering design but cannot compete with a multi-disciplinary approach to SYSTEMIC INNOVATION.
There are THREE key factors determining World Wide Wealth & Welfare.
These are:
Process Effectiveness (optimized Quality and Productivity)
Systemic innovation, and
Peace in the world
Capture of a fair share of value (by the end-user and each SBN member) can be achieved by collaborative negotiation. The parties (including such as Nokia!) would act synergistically by contributing their respective cutting-edge competences during a ‘pre-competitive pilot phase’ prior to globalization of mass-customized mobile processes.
The foregoing outline is a conclusion reached in collaboration with
* Professor Gunnar Sohlenius, Sweden * Professor Hans Andersin, Finland * Professor 'Kenny' Preiss, Israel, and * Distinguished Professor Emeritus Don Cowan, Canada.
We plan to write more about how MPS can contribute to World Wide Wealth & Welfare on a new win-win-win-win web-site that is under development:
www.w-w-w-w.org
Five MPS/PFCN-related publications are: * Sweden 1984 (Pharmacia News) * Stockholm 1995 (Ericsson Mobile Data News) * Helsinki 2005 (Agility conference) * Canada 2008 (Agent approach) * Poland 2008 (Virtual Enterprises)
The MPS VISION was published by MobileMonday in January 2005: ‘It’s a bird, no it’s an airplane .....no, it’s Mobile Process Service’.
http://www.mobilemonday.net/news/its-mobile-process-service
US patent applications pending.