Nokia, the world leader in mobile phone supplier, is burning. There is no denying. And the Q2 results are pointing towards a future where recovery is hard but certainly not impossible. Read the complete Q2 report here.
The net sales are down by 23% this quarter compared to 20% in Q2 last year. Total smart phone devices sold in Q2 equates to 16.7 million, down from 25.2 million from last year which is a significant drop, which is lower than total number of iPhones sold (Apple sold 18.5 million iPhones in Q2 2011) so clearly - Apple is the new leader of smartphone manufacturing world. QoQ % change is a disappointing 18% which is pretty big because we are just comparing Q1 and Q2 here. Operating profits are down 44% since Q1. More details on the Official Nokia Blog
Besides all the doom and gloom, Stephen Elop is optimistic (what other option does he have anyways) about seeing positive results in upcoming quarters. Segment from his official statement;
"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than-expected progress toward our strategic goals."
Let me highlight the most relevant part of his statement:
The net sales are down by 23% this quarter compared to 20% in Q2 last year. Total smart phone devices sold in Q2 equates to 16.7 million, down from 25.2 million from last year which is a significant drop, which is lower than total number of iPhones sold (Apple sold 18.5 million iPhones in Q2 2011) so clearly - Apple is the new leader of smartphone manufacturing world. QoQ % change is a disappointing 18% which is pretty big because we are just comparing Q1 and Q2 here. Operating profits are down 44% since Q1. More details on the Official Nokia Blog
Besides all the doom and gloom, Stephen Elop is optimistic (what other option does he have anyways) about seeing positive results in upcoming quarters. Segment from his official statement;
"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than-expected progress toward our strategic goals."
Let me highlight the most relevant part of his statement:
In Smart Devices, those who already have viewed our early Windows Phone work are very optimistic about the devices Nokia will bring to market and about the long-term opportunities. Step by step, beginning this year, we plan to have a sequence of concentrated product launches in specific countries, systematically increasing the number of countries and launch partners.Oh, we have seen Sea Ray before, Mr Elop and there is no denying, it's one helluva device.
Nokia is planning to launch it's first Windows phone device this month - hopefully by October, according to rumors. There aren't any major launches in Q3 so we can expect similar results or even worse. Some analysts are predicting absolute land slide in future quarter results.
I have already mentioned this before, it's make or break time for Nokia. They have to nail the launch. It's do or die situation for Nokia. It's not so hard but if they launch the mobile to limited countries - I am expecting initial launch of Nokia wp7 in Europe and North America, then things might get a little complicated. Their biggest market is Asia and they cannot afford to neglect this market. Nokia is expected to launch couple of devices this year and from the looks of it - N9 with Windows Phone 7 mango looks like the best possible combination and could be Nokia's path to recovery. Everyone at Nokia is probably working harder at this stage then they ever have in their entire life since they rose to global fame. So you cannot just give up on Nokia. Stephen Elop is trying something different - time will tell if it works in favor or against. MBA students, this might be a perfect case study for you. Keep your eyes glued. Q4 will be delicious.
