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Nokia Week in Review (Week of July 17)

July 21, 2006 in Wireless Industry News

In this edition of the Nokia Week in Review: earnings, earnings, and more earnings. And Nokia’s Flagship store.

This was earnings week for many of the cell phone manufacturers: Nokia, Motorola, and Ericsson.

After a pretty crappy 1st quarter that included some shipping slowdowns, Motorola reported that earnings increased by 48% – most of which resulting from sales of the ever-popular RAZR flip phone. Motorola also managed to boost handset market share to 22%, compared to 13% 18 months ago. Motorola’s share price skyrocketed nearly 7% at the news. The only other exciting development in the Motorola world was the pre-announcement of several new RAZR phones that would be unveiled next week at an analysts’ meeting.

Not to be outdone, Ericsson (of Sony Ericsson) also beat estimates by .03 “kronor,” mainly due to the strong sales of the Walkman line of cell phones. Profits were higher than the analyst estimates, but sales fell a little short of expectations. Earnings for Ericsson would’ve been slightly higher if not for the purchase of communications company Marconi. Ericsson is still the #1 supplier of network equipment in the world.

Meanwhile, #1 handset maker Nokia managed to post some pretty impressive numbers, for the most part. Profits increased by 43% in the second quarter, with strong sales in emerging markets (China, India). Mobile phone sales also increased by 22%. However, Nokia’s network operations division sucked it up big time, even with the Siemens merger. In terms of market share for mobile phones, Nokia currently sits at 34% (compared to Motorola’s 22%). Nokia’s stock (NOK) gained a little more than 2% on the news, but lost almost 4% today.

Last Saturday, Nokia officially opened its first Flagship Store in Chicago, IL. The store is meant to showcase Nokia’s many lines of cell phones, including the super-expensive Vertu line. While the store will sell some of the newest models before they’re sold anywhere else, there’s no discounts: everything will be sold at retail price. Interesting fact: the designer of the widely heralded store – Eight – also designed the infamous Apple stores around the country. Interesting fact #2: Motorola has a Q store down the street. So much drama!

Earnings week is always full of fun and surprises. Tune in next time for another Week in Review.



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