Nokia is having a slump in sales. This at the same time that doubts have been cast by a reader on the ratings of smart phones. Quite right too.

It gives a fair picture of the doom and gloom when Nokia announces it wants to slash costs in its mobile phone division by more than $900 million by the end 2010.

Nokia has dropped its forecast for the number of phones the industry — note not Nokia alone — will sell in 2009. And that is the second time in seven weeks. Nokia thinks the mobile will be down 10 percent in 2009, to just over 1 billion phones.

This is not just Nokia. The slowdown is being felt across the industry. Motorola and Sony Ericsson having recently announced quarterly losses. Even Apple has seen sales of its iPhone slow in recent weeks but over the year as a whole, Apple sold 13.7m, better than its 10 million target, although that was always seen as rather conservative.

The Guardian, a newspaper which tends to get it right, says that instead of grabbing 40 percent of the market as it had done in the fourth quarter of 2007, Nokia had 37 percent in the last three months of 2008. That is a drop no matter how you put it, and no matter how you try to change the relative positions of the company.

Nokia, correctly, has tried to deal with this by discounting the price of handsets yet at the same time, ‘margins have also been hit by a higher proportion of sales of cheap lower-margin devices in the fourth quarter of the year.’ And that is a direct quote from The Guardian.

So we have the unhappy situation of Dow Jones reporting a 69 percent drop in fourth-quarter profit for Nokia as demand for its handsets fell sharply during the key holiday season, particularly in China, and as it lost market share in the lucrative high-end segment.

Geoff Blaber, a senior analyst, said, ‘It’s a bloodbath, really. Much worse than what we ever expected from Nokia.’ And that report came from Dow Jones.

Nokia said it lost ground in the Middle East and Africa, North America and China. It also lost ground in the high-end, smart- phone category.

Related:

Entry was posted on Sunday, January 25th, 2009 at 6:18 pm under Uncategorized.

Read more entries by Gareth Powell.
Stumble It!