Seemingly unable to effectively combat competition from Apple and Samsung smartphones, and losing share in the low-cost handset segment, Nokia is expected by analysts to report a fall in its fourth quarter profits--the third quarterly fall in a row.
Despite being boosted by seasonal demand, Reuters anticipates that the company's new CEO, Stephen Elop, will announce next Monday a 24 per cent drop in underlying earnings per share to €0.19 for the 2010 October-to-December period.
This decline, which is expected to be worse in the first quarter of 2011, comes as Nokia faces increased competition from smartphone vendors such as Apple, Samsung and HTC, as well as coming under huge pricing pressure from the likes of ZTE at the budget end. The company has seen its market share in India halved in just a few quarters, and has experienced a huge drop in its 60 per cent market share in 2009 to around 30 per cent last year.
Commenting ahead of the results, analysts from UBS analyst said: "We remain concerned about market share issues in the low-end due to local competition in emerging markets such as India and the Middle East and Africa."
Globally, Nokia is expected to have sold 130 million phones in the fourth quarter, only 2 per cent more than a year ago.
However, some analysts expect more positive news from Nokia next week with the company's more recent handsets seeing good demand during the last quarter. "Most importantly we see that Nokia's new devices are facing a very robust demand including the C3 and the N8,"Swedbank analyst Jari Honko told Reuters, who noted component shortages still hindered Nokia's shipments in the quarter.
- see this Reuters article
Analysts: Nokia's N8 could revive company
Mallinson: How should Stephen Elop rebuild Nokia?
Nokia sidelines Symbian to low-end; makes 300 staff redundant
Nokia: Elop reshapes company with new CMO appointment