Profit Figures Show Nokia Needs To Make A Competitive Smartphone

by Ferman Aziz

Nokia has released its sales and profit figures for the second quarter of 2010 and though the cell phone giant continues to dominate the world in low-end and mid-range device sales, it’s suffering in the smartphone market. Nokia has shipped more than 111 million mobile devices in the 2nd quarter of 2010 with sales reaching over $ 12.8 billion, up 8% from Q 3 2009. Net sales of Nokia’s devices and services business segment increased by 3% to $8.7 billion, but the average mobile device selling price dropped to $78, down from $82 in the second quarter of 2009. That’s a 40% drop in net profits.

It’s obvious that Nokia is losing the big bucks that smartphone makers like Apple and RIM are earning truckloads full of. Nokia phones are the most trusted and durable devices in the world and a killer smartphone from the company is sure to give some real competition to all existing devices in the market but no such indications have come from them.

Nokia CEO Olli-Pekka Kallasvuo talked to CNBC today and apart from discussing the sales figures, addressed the recent rumours that hit the media about Nokia looking to replace Kallasvuo.

I’m not in a position here and now to really shed any more light on the topic,” he said. “There has been a lot of speculation on my position, on myself, during the last couple of weeks and that is not good for Nokia and must be brought to an end one way or another.

Kallasvuo expressed hopes and optimism about Nokia’s future in cell phone sales and its existing smartphones.

Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future. For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our Mobile Phones business, helped by an improving line-up of affordable models.

In smartphones, we continue to renew our portfolio. We believe that the Nokia N 8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fight back at the higher end of the market.

[via Nokia]

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