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RF Micro counts Nokia as its largest customer by far. In last night's third-quarter report, total sales increased by 11% year-over-year but fell 2.4% from the previous quarter to land at $279 million. But if you take Nokia out of the equation, sales jumped more than 60% year-over-year.
Let that one sink in for a bit.
So it's clear from RF Micro's results that Nokia will report weak sales of its own tomorrow. Still the largest handset seller in the world by units, the Finnish giant is in decline as it loses market share in the all-important smartphone segment. Those are no longer the coattails you want to ride to riches, as RF Micro has learned the hard way.
CEO Bob Bruggeworth thinks the worst may be over, though: "These headwinds that we were facing at our largest customer are now subsiding, and we're going to be growing," he said. The second quarter of RF Micro's fiscal year 2012 is where he sees growth resuming "in any meaningful way at our largest customer," which translates to the September quarter.
Nokia is under new leadership with a chance to remake the business. However, the onslaught of Android and Apple (Nasdaq: AAPL ) smartphones won't subside, Research In Motion (Nasdaq: RIMM ) is still claiming its share of the enterprise-phone market, and Microsoft at least gets good reviews for its Windows Phone 7 handsets. A quick turnaround for Nokia seems out of the question, making RF Micro look smart for diversifying its business a bit.
Add RF Micro to your Foolish watchlist, and check back tomorrow for the real dirt on Nokia's results.