Loading...
Symbols:
Authors:

Nokia Tumbles, Dragging Handsets Down

by: Eric Savitz September 05, 2008 | about stocks: AAPL / MOT / NOK / PALM / QCOM / RIMM    

Eric Savitz

From Barron’s:
Introducing Barron’s Daily Stock Alert: Try it FREE for 30 days
Subscribe to Barron’s Online
Visit Barron’s New Market Data Center
Become a Contributor Submit an Article
  • Font Size:
  • Print

Nokia (NOK) this morning warned that it now expects its mobile device market share in the third quarter to be down from the second quarter. The company had previously said it expected its share of the market to be sequentially flat.

Nokia said it continues to target an increase in share for the full year.

The company also said it expects the overall mobile device market this year to be “impacted by the weaker consumer confidence in multiple markets,” although it still expects device volume to grow 10% or more from 1.14 billion units last year. Nokia said it still expects industry units to be up sequentially in Q3, but lower than previously expected.

Nokia cited several reasons for its expected share loss in the quarter, including a “tactical decision to not meet certain aggressive pricing of some competitors, the overall market competition, including the entry markets, and the temporary impact of a slower ramp-up of a mid-range Nokia device.”

The company said its strategy “is to take market share only when the company believes it to be sustainably profitable in the longer term.” Nokia noted that “it has not broadly participated in the recent aggressive pricing activity - as it believes that the negative impact to profitability would outweigh any short term incremental benefits to device unit sales.”

Nokia said it expects product launches and start of shipments to be on track during the remainder of the third quarter and the fourth quarter 2008. “Driven by its new products and services, Nokia continues to believe its product portfolio will be very attractive for the rest of the year,” the company said.

Nokia reports third quarter results on October 16.

Nokia shares this morning are down $2.24, or 10%, to $20.07. Other key handset stocks are down as well, with Research In Motion (RIMM) off $3.75, or 3.49%, to $103.11, Qualcomm (QCOM) down $1.05, or 2.16%, to $47.49, Palm (PALM) down 22 cents, or 2.9%, to $7.38, Motorola (MOT) down 16 cents, or 1.75%, to $8.98 and Apple (AAPL) down $1.09, or 0.57%, to $160.13.

Related Articles

This article has 3 comments:

  •  
    Sep 05 10:43 PM
    In plain english Nokia is saying we have nothing that competes with the iPhone and can't match its price.
    Reply
  •  
    Sep 06 10:48 AM
    even in this economy, the smartphone trend is up. once you've used an iPhone, it's hard to just want a phone.
    Reply
  •  
    Sep 12 02:58 AM
    Qualcomm will also suffer a great if Nokia continues to weaken.
    Reply
More Comments on NOK »
More by Eric Savitz
Investment Resources
Money Managment
Research
Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Cell Phones
Digital Cameras & Printing
Digital Home
DVDs