Nokia Reports Losses In 2nd Quarter

July 22nd, 2011 at 1:09 pm
 


While other tech giants have been reporting record profits during their recent quarterly results, it seems that there are also other companies that might be going the opposite way. It just goes to show that not all things in tech may be enjoying a great year. One of the unfortunate ones is struggling mobile phone maker Nokia.

Nokia has recently reported that it posted a net loss of 368 million Euros, or around $523 million for the 2nd quarter of the 2011 fiscal year. A major reason for the loss was a considerable slip in unit sales of its mobile phones. And the company was expecting such a dismal performance for the 2nd quarter amid tough competition in the market.

Nokia posted sales of 9.3 billion Euros or $13 billion. That’s a 7 percent dip from the revenue of the same quarter during the previous year which stood at 10 billion Euros or $14 billion. The sales for the current quarter suffered because of the tough competition from iPhone and Android handset sales in the high end category. The company even suffered quite a bit of problem from its usually robust low end feature phone division. Its market share is slowly being eaten away by cheap phones coming from China.

The problem that Nokia finds itself in is not something that wasn’t see coming to them. The arrival of the Apple iPhone should have signaled the erstwhile mobile phone leader to keep in step with the upcoming competition. But Nokia stood on its ground and never bothered to make something that will compete with Apple’s entry into the mobile phone market. This resulted in Nokia losing steam in terms of its market share being taken in the high end smartphone category by the iPhone. The entry of the Android smartphones only made it worse.

Despite the current dismal state that Nokia finds itself in, the company still has some fight remaining. It has teamed up with Microsoft in making Windows Phone handsets and ditching its proprietary Symbian mobile OS in the process. The company hopes to come up with competing smartphones running on the new Windows Phone OS along with its accompanying support of other Microsoft software products.

Although their might be some hope left for Nokia, the fact that its market share in the mobile phone market is rapidly dwindling is something that can be quite hard to recover from. It has recently gone from the top spot to third in terms of market share as it has relented to Apple and Samsung to go above it. The challenge that Nokia is left to face is how to make their upcoming Windows Phone handsets build up a considerable customer base. It may be similar for Nokia to be starting over. Considering that its main competitors have some considerable headway going into the race, Nokia may have a long and difficult challenge of playing catch up.

 

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