Confirming numerous rumours, Nokia has revealed that its second quarter handset revenues and margins will be "at the lower end of or slightly below" its previous range of forecasts. The company has also cut its outlook for the full year.
However, this anticipated downturn has not stopped the famous speculator, George Soros from buying nearly US$17 million of Nokia shares. Soros, who has made billions on controversial high risk investments, has only recently opened his position in Nokia shares using his Soros Fund Management vehicle.
Commenting on this latest gloomy picture, Bengt Nordstrom, a telecoms consultant at Northstream, said: "Somehow they've lost the sense of understanding where the market is going. There was a time when Nokia dictated for the industry how a mobile phone should look and function. It's not for them to decide alone anymore what customers want--they have strong competition from other players, particularly from Apple."
The company said it planned to launch the much-anticipated N8 phone in the third quarter based on Symbian^3, and would feature Ovi Maps turn-by-turn navigation and a 12 megapixel camera. Early reviews of the product compare it favourably with the iPhone 4. Those having had the chance to use early versions of the N8 praise its camera and video capabilities.
Obviously not wanting to bank too heavily on the likely success of the N8, Nokia painted a bleak future for the company over the next six to nine months. This included lower average selling prices and volumes, device and services operating margins would miss the company's 9 per cent to 12 per cent target, and critically the company expected to lose share in the smartphone market.
One factor that could help Nokia, and might be the reason behind the interest from Soros, is the recent fall in the value of the Euro compared to other currency areas where the company trades.
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