The world’s largest manufacturer of cell phones, Nokia Corp. (NOK) reported first quarter earnings today and the company missed estimates both for revenues and EPS. Revenues totaled 9.52 billion Euros against a consensus estimate of 9.69 billion Euros. EPS came in at 0.14 Euros, again missing estimates of 0.15 Euros.
The company did boost sales volume of what it calls converged mobile devices, a category that includes Nokia’s smartphones and mobile computing devices. The company estimated total global volume in the first quarter at 52.6 million units. Nokia sold 21.5 million units in this market, earning a 41% market share. This represents improved performance year-over-year and sequentially.
Total devices shipped amounted to 107.8 million units, which was up 16% year-over-year but down 15% sequentially. China represented the only gain of Nokia’s reported regions.
Unfortunately for Nokia, its average selling prices are falling too. Over all its mobile devices, selling prices fell from EUR66 in the first quarter of 2009 to EUR62. Sequentially, average selling price fell by EUR2. Even more unfortunately, the smartphone prices fell the most, from EUR190 a year ago and EUR186 last quarter to EUR155.
Nokia’s 57% increase in smartphone sales during the quarter pales in comparison to Apple’s (APPL) 131% increase in iPhone sales for the same period. Granted that Nokia sold more phones, 21.5 million to Apple’s 8.75 million, but Apple notches more than $600/iPhone in revenue for each phone sold.
Nokia also announced today that it would delay the release of its new version of the Symbian operating system until the third quarter due to quality issues. The new operating system will be going into Nokia’s new smartphones, so the software delay will have an impact on the company’s sales until the issues can be sorted out.
Nokia simply missed the smartphone train when it left the station. It has been running to catch up ever since. Its smartphones don’t deliver the features of either the iPhone or devices built on Google’s (GOOG) Android operating system. Unless Nokia can figure out a way to compete on the high-end, the company is in danger of fighting it out for the very low margins in the basic cell phone business.
Nokia shares are taking a beating so far today, off more than 13% so far. Volume is about 5X higher than normal, too.
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