Nokia Fail - profits down 66%

OK, I know Nokia is big in Europe and that their smartphone share is hovering around 40%, but this can not be good news for the Finnish firm (no pun). In a recently released performance statement, the company turned in a second quarter net profit of €380 million on sales of €13.15 billion - that compares badly with a net profit in the same period last year of €1.10 billion on sales of €13.15 billion. The statement also predicted that volumes for the third quarter will be about the same as for the second quarter, and overall the entire mobile industry is expected to fall 10 percent from levels in 2009.

Originally, Nokia had expected market share to rise in 2009, presumably based on a successful launch of the N97 flagship device. However, the N97 has been almost universally panned as out of date, cumbersome and behind the curve. Furthermore, Generator Research says that Nokia's smartphone marketshare will plummet from over 40 percent today to only 20 percent by 2013. On the other hand, they predict that Apple will hit 33 percent market share by that point, matching Nokia sometime in 2011—just two years away—with 77 million phones. There is always a chance that Nokia could pull out of the slide, but it will take something a lot more compelling than the N97. And, that 77 million number that Apple needs to hit is looking pretty big - even for an admitted fanboy like me.