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Nokia surrenders smartphone lead to Apple: Finnish firm may even fall to third place in market Sales dip sharply with loss of pounds 368m in last quarter(Guardian (UK) Via Acquire Media NewsEdge) The struggling Finnish phone maker Nokia has surrendered its position as the world's biggest smartphone business to its key rival Apple - and has crashed to a loss of euros 368m (pounds 324.5m) over the last three months as sales fell sharply. The group, which once had 40% of the market, could fall as far as third place in the smartphone sector behind Samsung and Apple, and with no clear sign of any improvement in the short term. The loss came despite Nokia receiving a one-off payment of euros 430m from Apple to settle a long-running patent dispute. Overall revenues fell by 7% to euros 9.3bn. The company's mobile division, normally the cornerstone of its business, saw its revenue fall by 20% year-on-year to euros 5.47bn and it rang up a loss of euros 247m as the number of phones sold also dropped by 20%, to 88m. The figures were the worst since 2006. Sales of Nokia's existing Symbian smartphones, which are being phased out and replaced by Microsoft Windows phones later this year, fell 30% year-on-year to just 16.7m. The Navteq mapping and Nokia Siemens Network (NSN) businesses also offered little comfort, both racking up operating losses of euros 58m and euros 111m respectively, although sales at NSN were up by 20%. Stephen Elop, the former Microsoft executive who took over as chief executive last September, said: "The challenges we are facing during our strategic transformation manifested in a greater than expected way. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business." But Francisco Jeronimo, research manager for European mobile devices at the analysts IDC, warned that Nokia risked missing out as more people switched to smartphones from older "featurephones": "I think it will take at least two or three quarters after the launch of Nokia Windows phone devices before they get positive results." More than 50% of mobile phone shipments in the US and Europe are now smartphones, and 30% of mobile users in the US and 38% in the UK already use them. Elop's forecast for the next quarter remained close to break even. He admitted there was "limited visibility" on it, but was "optimistic" about the Windows phone's potential in the long term. Nokia's shares moved up in early trading by about 4%, to trade at about euros 5.80, because analysts had expected worse - but the shares have almost halved in value since February, when Elop announced its tie-up with Microsoft. The results contrast spectacularly with Apple's from Tuesday, when it said that it had sold more than 20.3m iPhones during the second quarter, even though there was no new model; the iPhone has not been updated since June 2010. Apple's sales from the iPhone alone, totalling $13.3bn (euros 9.4bn), mean that its mobile phone business generated almost twice the revenue of Nokia's in the same period. Samsung will release quarterly earnings next week that are expected to show that it has leapfrogged Apple and Nokia to take the lead in the smartphone market. Smartphones running Google's free Android operating system now make up the largest share of the top-end devices, with about 36%. Apple's latest sales figures suggest that it has grabbed about 20%. Nokia dominated the mobile phone business for almost two decades, and for years had most of the valuable smartphone market. Captions: Booming iPhone sales shows that Apple's mobile business generated almost twice the revenue of Nokia in the last quarter (c) 2011 Guardian Newspapers Limited. |