Nokia returns to the daylight; Ovi booms but R&D cut

Having spent most of 2009 in the wilderness, Nokia has returned to profitability with net profits of €948 million, compared to €576 million for the same quarter a year ago. Of particular note was Nokia's growth in the increasingly competitive smartphone segment--up from 35 per cent in Q3 to 40 per cent in Q4.

While the company sold 20.8 million smartphones during the quarter, including 4.6 million of its N-series multimedia handsets, Olli-Pekka Kallasvuo, the CEO of Nokia, admitted that the company was still "lagging with high-end mindshare products, but was working hard to regain its leadership position."

Kallasvuo added that, while Nokia had a good portfolio of products, it needed a great line-up. "Apple continues to be a great competitor, no doubt about that. But we have our assets as well. Our strategy is in democratising the smartphone in a massive way."

Of particular note was Nokia's claim that its Ovi Store was now serving more than one million downloads a day. While this number is miniscule compared to Apple's iStore with around 330 million per month, it claims to have overtaken Apple in Asia and Latin America to become the most-used mobile application shop in those regions.

That figure is likely to gain further momentum by downloads of Nokia's latest Ovi Maps navigation app, which now delivers free turn-by-turn directions. The company also indicated its strategy of consolidating its various services under the Ovi umbrella was well underway, with Nokia Music Store next in line for a rebranding.

Nokia cut its R&D spending by about 9 per cent to roughly €1.6 billion, although this was downplayed by the CEO maintaining that high-end smartphone investment would continue and there was no need to ramp up engineering effort.

Sales and marketing budgets were also slashed by 18 per cent to €1.05 billion, and the company cut its general administrative expenses by about 15 per cent to around €294 million compared to the year before.

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