-- A.R. Ammons, "Cold Rheum"
Finnish mobile phone giant Nokia
But this week's first-quarter report makes Nokia look positively mortal. Sales plummeted 27% year over year, to $16.5 billion, adjusted to current exchange rates. Mobile device unit sales were down 19%, so average selling prices appear to have swooned as well.
Last quarter, Nokia's world-beating global market share dropped a couple of percentage points, to 37%, but the company managed to stop the bleeding in the first quarter; its market share stood firm at that figure. Under International Financial Reporting Standards, earnings per share landed with a dull thud at $0.04 per American depositary receipt (ADR) -- a heart-stopping 91% below last year's total.
Nokia's unique market strengths -- massive economies of scale and heavy focus on emerging markets and the tech-hungry pan-Asian arena -- clearly aren't doing the company any favors these days.
That's the sad part of Nokia's story. Let me give you the good news too.
Nokia has shifted 3 million units of its first touchscreen phone, the 5800 XpressMusic model, in only four months of existence. That's comparable to the early success of Apple's
CEO Olli-Pekka Kallasvuo (don't you just love Finnish names?) also noted that retailers and distributors have been ordering fewer phones so they could clear out existing inventories -- and that the clearance process should be over and done with now. That put a hurting on Nokia's first quarter, but should bode well for coming quarters. If nothing else, "it has also resulted in the demand picture becoming more predictable," Olli-Pekka said.
So Nokia bleeds if you cut it, just like Apple or Motorola
Nokia’s forecasts that dwindling inventories could lead to future smartphone demand sent its ADRs surging more than 11% during trading yesterday. The momentum swung through the smartphone industry, propping up fellow smartphone makers Research In Motion, Palm
I don't own Nokia shares, but would be pretty comfortable with my position if I did. Here's your chance to buy an established market leader with a good shot at bouncing back strongly -- at very reasonable prices.
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Fool contributor Anders Bylund doesn't own shares in any of the companies discussed here. You can check out Anders' holdings or a short bio if you like. The Motley Fool is investors writing for investors.