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Challenging times see Nokia's Q2 2010 sales up 1% to 10 billion euros, but profits slide 15%

Smartphone sales up 42 percent year-on-year

Challenging times see Nokia's Q2 2010 sales up 1% to 10 billion euros, but profits slide 15%
Nokia (NYSE: NOK) has announced its Q2 2010 financials for the three months ending June 30.

Net sales were €10 billion ($12.9 billion), up 1 percent year-on-year.

Operating profit was €660 million ($851 million), down 15 percent year-on-year.

Nokia's main devices and services division booked the majority of sales - €6.8 billion ($8.8 billion), up 3 percent year-on-year. It saw a fall in profitability however, down 16 percent to €643 million ($830 million).

Nokia operating cash flow was €944 million ($1.22 billion), and it ended the quarter with total cash and other liquid assets of €9.5 billion ($12 billion).

Still top cat

Nokia remains the world's largest mobile device manufacturer by some distance. It estimates its overall market share is 33 percent, unchanged compared to Q1 2010. Nokia has around 41 percent of smartphone market, the same as Q1 2010.

Its total sales of mobile devices during the quarter were 111.1 million units, up 8 percent year-on-year.

Smartphones and mobile computers accounted for 22 percent, 24 million devices, up 42 percent year-on-year.

However, the overall amount Nokia makes from each device sold dropped slightly from €62 ($80) to €61 ($78.7).

Price deflation was even more marked in the smartphone market, with the average price of €143 ($184), down from €155 ($200) in Q1 2010 and €181 ($234) in Q2 2009.

Reasons to be cheerful

"Despite facing continuing competitive challenges, we ended the second quarter with several reasons to be optimistic about our future," said CEO Olli-Pekka Kallasvuo, whose job is thought to be under threat as the company looks for a new US CEO to improve its performance in the North American market.

"For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our mobile phones business, helped by an improving line-up of affordable models.

Nokia is looking to the launch of its high-end N8 device - the first to use the new Symbian^3 operating system - to kickstart its smartphone business in the second half of 2010.

Kallasvuo revealed the company would also be releasing more Symbian^3 phones, but these aren't expected to be its Nseries, which will be shifting to the Symbian^4 operating system, while Nokia's mobile computing devices will use the MeeGo OS.

[source: Nokia]
Contributing Editor

A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.