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Week in Review (Week of October 15)

October 19, 2006 in Wireless Industry News

Today was one of four important days of the year for Nokia Corp. – specifically, it was Third Quarter Earnings Announcement Day. Unfortunately, the news was sort of mixed for the company, as their earnings were slightly short of analysts’ estimates (by one penny per share, no less).

It wasn’t horrible news, and it was definitely much brighter than Motorola’s disappointing earnings results two days ago. Here’s the low points:

  • Due to strong sales in emerging markets, Nokia’s average selling price per handset dropped pretty significantly from $129 to $117. Analysts were expecting more a drop to $126. Ouch!
  • Operating profit dropped 11% from last year’s third quarter.
  • Sales of CDMA phones were weaker than expected.
  • Sales in the USA were just plain weak. Nothing new there, I think.

On the flip side, sales were strong in Europe, Asia, and in the emerging markets (Africa, Middle East).

One way I can usually tell how a phone manufacturer’s doing in the USA is by asking people (friends, acquaintances, anyone I run into) what phone they use. And the last time I checked, only one person (besides me) actually carries a Nokia phone – and it’s a 3595, aka one of the Budget Phones. Of course, the majority of phones go to Motorola and their RAZRs (which should tell you something, Nokia!), but usually there’s some Samsung or LG representation. The few informed friends I know carry around Sony Ericsson phones – but they’re still quite the minority.

The good news is Nokia’s upcoming fourth quarter cell phones should provide a nice little boost, especially in the American market. There’s a couple interesting phones headed for US GSM providers, such as the Nokia 6133, N73, and N75 (although N75 will probably be first quarter 2007). It’s a good start, anyway.

The second good news is that while Nokia’s stock price dropped 3%, it wasn’t as drastic as Motorola’s nearly 6% drop. I suppose Nokia’s third quarter results weren’t as drastic either.

Sadly, that’s it for this edition of the Nokia Week in Review. Tune in next week for some more juicy bits of wireless industry news.


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