Nokia Sees Profits Slide 40 Percent

By Geoff Duncan July 22, 2010

Finland’s Nokia is still the world’s largest maker of mobile handsets, but the company has been facing tough competition in the smartphone arena recently, seemingly unable to respond meaningfully to the popularity of devices like the Apple iPhone and phones running Google’s Android platform. And the company’s financials are showing the pressure: Nokia’s operating profit for the second quarter of 2010 was down some 40 percent compared to a year ago, although the company still brought in some €227 million (about US$290 million). And while the company didn’t see any significant gain in sales for the quarter, it also didn’t lose any ground.

“Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future,” said Nokia CEO Olli-Pekka Kallasvuo, in a statement. “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.”

Nokia managed to sell 111 million handsets during the quarter, which is an 8 percent increase from the same quarter in 2009. And Nokia also saw a sharp increase in the number of smartphones and mobile computers it’s selling: up 42 percent to 24 million units. However, that was just enough to keep Nokia’s share of the smartphone market steady at 41 percent—the company didn’t lose ground during the quarter, but didn’t gain any either.

Nokia recently announced a broad re-organization the company says will streamline its operations and help it bring new products to market faster; Nokia also sold its wireless modem business to Renesas.

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