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Nokia Sales Flat At EUR 10 Bn, Operating Profit Down 15%; Device Volumes Up 8%

Nokia reported net sales of EUR 10 billion for the quarter ending June 30th 2010, up 1% year-on-year and 5% sequentially, and an operating profit of EUR 660 million, down 15% year on year and 20% quarter on quarter. The devices and services segment contributed EUR 6.8 billion to net sales, up 3% year-on-year and 2% sequentially, of which services contributed EUR 158 million (up 7% sequentially); the segment reported gross margin of 30.2%, down from 34.0% in Q2-2009 and 32.4% in Q1-2010. The devices and services segment reported a 19% decline in operating profit year-on-year, and 20% quarter-on-quarter. Interestingly, billings for the services segment were up 29% sequentially, at EUR 295 million.

Device sales for Nokia were up 8% year-on-year and 3% sequentially, at 111.1 million units, of which Nokia converged mobile device (smartphone and what Nokia calles “mobile computer”) reported volumes of 24 million units, up 42% year-on-year and 12% sequentially, despite a reduction in Nokia’s oveall Average Selling Price (including services revenue). ASP fell from EUR 62 in Q1 to EUR 61. According to Nokia estimates, the handset market for the quarter, in terms of device volumes, was 338 million units, 14% up year on year, and 5% sequentially. Nokia has, clearly, underperformed the market. This led to a further reduction in global marketshare for the company, down to an estimated 33% Q2-2010, compared to 35% in Q2-2009; Nokia believes its marketshare remained unchanged quarter on quarter. The company also estimates that the overall mobile industry shipped around 59 million converged mobile devices globally during the quarter. Nokia claims its preliminary estimated share of the converged mobile device market was 41% in the second quarter 2010, unchanged quarter-on-quarter and year-on-year.

In terms of its expectations for the coming Quarter, Nokia expects Devices & Services net sales to be between EUR 6.7 billion and EUR 7.2 billion. The company expects industry mobile device volumes to be up approximately 10% in 2010, compared to 2009, and for its own market share to be flat in comparison with 2009.


– To support the expansion of Ovi, Nokia acquired MetaCarta Inc. to obtain its geographic intelligence technology and expertise, and Novarra Inc., whose mobile browser and services platform will be used by Nokia to deliver Mobile Internet to Series 40-based mobile phones.
– Ovi launched unlimited music downloads offering to China and India, and expanded Ovi Life Tools to China.
– Downloads of Ovi Maps, now free (but still making Tanla Mobile money), reached more than 17 million by the end of the quarter.
– Nokia tied up with Yahoo:Nokia will provide Yahoo with Ovi Maps, while Yahoo will power Ovi Mail and Ovi Chat services.
– Nokia and Microsoft launched Microsoft Communicator Mobile, the first application developed together, available for Nokia Eseries.
– Ovi Store attracts 1.7 million downloads a day. Ovi App Wizard achieved 1 million downloads in just 10 weeks since launch. 90% of Nokia consumers who can access Ovi Store can now do so in their local language, while more than 80% of those with local language availability can also purchase from Ovi Store in their local currency.

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Additionally, NAVTEQ added the Lonely Planet Travel Guide to its India map.

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