Cellular handset vendor Nokia Corp., said last Tuesday (May 31) expects its expected net sales of devices and services is much lower than its expected range in the second quarter from 6.1 billion euro (8.8 billion U.S. dollars) and 6.6 billion euro (9.5 billion U.S. dollars).
Nokia (Espoo, Finland), has blamed the deficit forecast in the competitive dynamics and market development in different price ranges, especially in China and Europe, the mix of product moving average device selling prices and gross margins and the tactics price of Nokia and some of its competitors.
Nokia, which previously said it expects sales in the third quarter nearly unchanged from the second quarter and expects a recovery in advertising sales in the fourth quarter, said Tuesday that the objectives are no longer valid. “Taking into account the unexpected changes in our outlook for the second quarter, Nokia believes it is better to establish annual targets for 2011,” the company said in a statement.
“The loss of the land of Nokia in the smartphone market has been well documented, but this result shows that is also struggling in the low, low-cost market, where the company has been particularly strong,” said Kevin Burden , a vice president and director of the practice of research firm ABI Research.
Burden said Nokia had planned its low-end models continue to do well in the markets of developing countries and to help the company through its transition into the software platforms and management. “This suggests that further intensifies the pressure on both ends of the market, and Nokia can not rely on any of its product lines to a deck of its past industry leader for what he hopes to be competitive the future, “said Burden.
Burden said, Nokia’s announcement also intensifies doubts as to whether Nokia will be able to deliver the phones that run Microsoft Windows phone OS in 2012, which is better than competitors’ offers.
“The key to Nokia’s strategy is his belief that the original line of phones with Windows, it can vault ahead of competitors, which is currently building phones based on Windows,” Burden. “The troubles began in Nokia by changes in management, compounded by changes in the strategy, now overflowing into the labor market performance is weak cementation doubt that Nokia can pull it off.”
Nokia announced Tuesday that he remains satisfied with its progress on its strategy of Windows phone. The company said it has increased confidence that the first Nokia phone with Windows will be available in the fourth quarter of 2011.
Nokia said it remains committed to the goal of reducing the pro forma devices and services cost 1 billion euro (1.4 billion dollars) and the full year 2013, when the entire 2010. The company said it intends to implement those reductions quickly and efficiently as possible.
“Strategic Transitions are difficult,” said Stephen Elop, CEO of Nokia. “We understand the need to provide mobile products, and therefore we must accelerate the transition. Our team is aligned, and we have increased our confidence that we will send the first Windows product Nokia Phone fourth quarter of 2011.”