Report: Nokia Basic Phones Generate Greater Profits Than Smartphones
July 19, 2011 3:44 PM
comment(s) - last by
But Q1 results for both Nokia basic phones and smartphones fell from last year
A few years back, it was common to mainly see basic phones in everyone's hands with a few smartphones here and there. Today, all that has changed as new versions of iPhones, Blackberry's and Android-based smartphones are released. In fact, new studies have shown that
35 percent of U.S. adults own smartphones.
not everyone is up-to-date
in the smartphone world. Nokia recently announced that its basic phones generate greater operating profits than its smartphones.
According to Nokia business results, its smartphone operating profit margin dropped to 6.2 percent in the first quarter. First quarter results from last year were at 10.4 percent. While Nokia's basic phones generate better operating profits, the margin on these phones experienced a drop as well from 19.4 percent last year to 16.5 percent this year.
"These numbers show
how behind Nokia smartphone margins are
compared with its rivals," said IDC analyst Francisco Jeronimo. "Nokia has been tackling the decline of its smartphone market share by focusing on the mid-tier price points and price cuts, which has had a straight impact on margins and profits."
With the basic phones market share falling to Asian rivals and the smartphone market share eaten up by Apple, HTC and Samsung, Nokia has fallen way behind in the races. Nokia Chief Executive Stephen Elop hopes to change this by introducing
new smartphones with Microsoft's Windows software
, but these efforts might be too little too late, since they're not expected to release until later this year.
Analysts predict that Nokia will experience a sharp fall in second-quarter results. These earnings are expected to be reported on July 21.
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RE: No wonder
7/20/2011 2:33:35 AM
The current Nokia smartphones are indeed using processors from two or three generations ago - if the current generation is considered dual-core A9 processors, the previous generation single-core but 1+ GHz.
By what I know, Nokia uses 600+ MHz processors in their smartphones, so they're indeed two generations back in terms of hardware. On the other side, the camera integrated in the N8 is the best smartphone camera on the market (not that this means anything)
RE: No wonder
7/20/2011 10:15:20 AM
I can use my C5 without charging for a week.
Howabout your iphone, droid? 1day?
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
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