Nokia has recently announced a financial loss in their third-quarter report, with a net loss of 559 million euros ($832 million) compared to a profit of 1.09 billion euros in the same quarter the previous year. This decline was primarily due to a significant drop in sales, which decreased by 20 percent to 9.18 billion euros from 12.2 billion euros in the corresponding quarter. Additionally, a write-down of the Nokia Siemens Networks unit contributed to the negative financial results.

Despite facing challenges, Nokia did observe some growth in mobile phone sales, although overall revenues were impacted by component shortages for several products. The company’s CEO, Olli-Pekka Kallasvuo, mentioned that mobile device demand had shown improvement in various markets during the quarter. However, the company faced constraints in volumes and net sales due to component shortages across its product portfolio.

Nokia’s share of the mobile device market remained stable at 38 percent during the quarter, with Nokia Siemens Networks, the jointly owned network equipment unit, experiencing difficulties in achieving profitability since its inception in 2007. The company had to write down 908 million euros related to this business unit.

Looking forward, Nokia remains positive about its outlook, expecting to reach a phone volume of 1.12 billion units for the year, a 7 percent decrease from the previous year but better than their initial estimate of a 10 percent decline. Additionally, they anticipate a 5 percent decrease in the mobile infrastructure and related services market compared to 2008 levels.

In summary, Nokia’s financial challenges in the third quarter were influenced by declining sales and issues within the Nokia Siemens Networks unit. Despite these setbacks, the company is focusing on improving its performance and remains optimistic about the future. The completion of the acquisition of GPS map specialist Navteq also reflects Nokia’s strategic moves to enhance its offerings and expand its market presence.


FAQs

  1. What were the key factors contributing to Nokia’s financial loss in the third quarter?

    • Nokia’s financial loss was mainly driven by a decline in sales and a write-down of the underperforming Nokia Siemens Networks unit.
  2. How did Nokia’s mobile phone sales perform during the quarter?

    • Despite challenges, Nokia saw some growth in mobile phone sales, although overall revenues were affected by component shortages.
  3. What was Nokia’s market share in the mobile device market for the third quarter?

    • Nokia maintained a market share of 38 percent in the mobile device market during the quarter.
  4. What challenges did Nokia Siemens Networks face during the quarter?

    • Nokia Siemens Networks, the network equipment unit co-owned by Nokia and Siemens, struggled to achieve profitability, leading to a significant write-down.
  5. What is Nokia’s outlook for phone volumes and market conditions going forward?

    • Nokia expects phone volumes to reach 1.12 billion units for the year, with a 7 percent decrease from the previous year, and anticipates a 5 percent decrease in the mobile infrastructure market.
  6. How does Nokia plan to address the issues faced during the third quarter?

    • Nokia is focusing on improving its performance, optimizing its product portfolio, and addressing challenges within Nokia Siemens Networks.
  7. What strategic moves has Nokia made to enhance its market presence?

    • Nokia recently completed the acquisition of GPS map specialist Navteq, demonstrating its commitment to expanding its offerings and market reach.

Summary

Nokia reported a financial loss in its third-quarter results, attributing it to a decline in sales and challenges within the Nokia Siemens Networks unit. Despite these setbacks, the company remains optimistic about its future outlook, aiming to optimize its performance and navigate through market uncertainties. The completion of the Navteq acquisition underscores Nokia’s strategic initiatives to strengthen its product offerings and consolidate its market position. For further updates and insights, visit our website and stay informed about Nokia’s ongoing developments and strategies.