Nokia this morning revealed a chunk of lost smartphone marketshare, a $1.35 billion hit from its networks unit and more bad news generating an immediate sell-off of the company’s stock.
The company revealed a net loss of $834 million dollars for its third quarter, this is significant as it represents Nokia’s first loss-making quarter in a decade.
Sales fell 20 per cent and the company’s slice of the smartphone market fell from 41 percent to 35 percent, as it faces stiff competition from Apple’s iPhone and the round the corner threat from Google’s Android.
This isn’t expected to equate to bad news for Apple, which is expected to reveal c.7 million iPhone sales in its current quarter, generating more momentum as it climbs to the top-tier of smartphone makers.
"Consumer demand may be showing early signs of improvement but these results show sustained pressure on smartphone margins. Apple’s iPhone is defying gravity in the high tier," CCS Insight analyst Geoff Blaber told Reuters.
Nokia has released a series of new smartphone models in recent months, but has as yet not put forward a significant iPhone competitor, and its presence in the US is far more limited than in other territories.
Nokia mobile devices saw 108.5 million units ship, down 8% year on year, though up 5% sequentially.
Apple meanwhile’s looking good, "In our view, Apple is ‘THE’ undisputed growth name in tech with numerous catalysts on the horizon (e.g. China iPhone ramp, netbook/tablet launch, etc.) and no business model issues," Brian Marshall of Broadpoint AmTech wrote in a note to clients on Monday. "In addition, Apple is currently benefiting from a positive mix shift (to higher margin iPhones/iPod touches)."
Credit Suisse analyst Bill Shope raised his price target on Apple’s stock to $235 a share from $200 on Tuesday, citing, an "increasingly optimistic outlook for 2010 iPhone demand and gross margins."
Responding to the changing cellphone market, Nokia is planning its own 3G netbook products – but these will also face Apple competition on launch of the much-rumoured Apple tablet.
Nokia shares currently stand at $13.82, down $1.57 on pre-market trading. Apple stock is at $191.29, though that’s down to $189.58, also on pre-market trades.
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