The Guardian is reporting that Nokia saw its profits fall a massive 90 per cent in the first quarter of 2009 as consumers demonstrably kept hold of last years handsets and retailers have held back on new purchases until old stock is depleted.
The lower sales volumes for Nokia and the industry, both year on year and sequentially, were primarily driven by the negative impact of the rapidly deteriorating global economic conditions, including weaker consumer and corporate spending, severely constrained credit availability and unprecedented currency market volatility, says Nokia.
Although smartphones such as the iPhone arent directly impinging on the mobile market, these figures show that a manufacturer that fails to address the feature rich handset competition - estimated to account for 23 per cent of the entire mobile market by 2013 - is likely to see further difficulties.
Nokias only saving grace has been the moderate success of its first fully touchscreen device, the 5800 XpressMusic (despite desperate claims that the N-Series is outperforming the iPhone) which has sold around 3 million units since its launch last November.
Sony Ericsson, on the other hand, has yet to address this small yet vital area of the mobile phone market, and has seen less than half the number of handset sales as the same period last year.
Another area that requires serious consideration is software support. Traditionally manufacturers like Nokia and Sony Ericsson are done with a sale once the handset is in the consumer's hands, but the proliferation of online application stores suggests users are beginning to expect some kind of connected support with their new phones - again, something Sony Ericsson has failed to address, though Nokia is preparing its new Ovi system.
It could be that this is the critical aspect that begins to drive mobile handset sales, in exactly the same way as software is the key to selling games hardware.
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