Nokia making no profit as share price plunges to 13-year low
Nokia has taken a knock with its share prices plunging to the lowest level in 13 years, after the Finnish company admitted it is currently making no profit on mobile phones.
Nokia has taken a knock, with its share price plunging to its lowest level in 13 years, after the Finnish company admitted it currently isn't making a penny of profit on mobile phones.
Nokia boss Stephen Elop warned that the company would only break even for the period between April and June. Nokia is still the largest maker of handsets in the world -- 100m per year -- but is being battered by competition from Apple's iPhone, phones using Google's Android software, and low-cost Chinese rivals.
Nokia's smart phone market share dropped from 44.2 per cent to 27.4 per cent in the last year, forcing price cuts. As a result, the company has failed to turn a profit this quarter, causing share prices to plummet to their lowest level since 1998. Crave didn't even own a mobile phone in 1998.
Contrast Nokia's fortunes with Apple, which has been in the phone game just four years and is raking in record profits: £3.6bn pure profit this year alone. It looks to us as though Nokia is in dire need of an iPhone or Samsung Galaxy S 2 or HTC Sensation -- a killer phone to boost its fortunes after the disappointment of the Nokia N8. The N9 may be coming soon, but the main event will be Nokia's eagerly awaited Windows Phone devices.
Nokia announced a deal with Microsoft earlier this year, and the first Windows Phones from Finland are set to be unveiled this summer. All Nokia's smart phones will make use of Microsoft magic, the company says.
The Finns are also set to continue producing phones using Symbian, the much-maligned software long associated with Nokia, until at least 2016. Symbian will power Nokia's non-smart phones, which makes up the bulk of the company's sales, especially in the developing world. It's those developing markets that keep Nokia ticking -- but Nokia is also taking a kicking in the low-end markets from Chinese manufacturers.
Can Nokia take the knocks? Is the Finnish company finished if it can't win with Windows Phone? Knock out your comments below.