It’s a dark day for the Finnish giant. Nokia’s second quarter financial results confirmed that fears over the future of its mobile device business were well warranted. Mobile device shipments slid 20 percent from the year ago quarter, sending net sales, operating profit, earnings per share and net cash in a downward spiral. The time to release a Windows Phone device is now.
According to Stephen Elop, “the challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011.” The Nokia Corporation, which consists of Nokia, NAVTEQ and the Nokia Siemens Networks, struggled across the board with the exception of the Nokia Siemens Networks. This segment actually showed a growth in net sales of 20 percent compared to the year ago quarter.
For Nokia, net sales fell seven percent, operating profit 41 percent, earnings per share (EPS) 45 percent and net cash and other liquid assets by five percent. The weakening demand in its mobile devices was not limited to smartphones. In fact, mobile phone sales fell 20 percent while smart device net sales fell 32 percent. As a result, Nokia reported its first quarterly loss in 18 months.
Stephen Elop believes “improved competitiveness in our Mobile Phones unit due to the ramp up of Dual SIM devices” and “timing of our new product shipments” will help the company recover quickly. Thankfully the stock market found the new favorable, helping Nokia’s pre-market value rise by seven percent on the NASDAQ this morning.
As a long time Nokia user, possibly a fan boy, the solution is simple. Start shipping Windows Phone devices and expand the launch from six European countries to twelve. Also, let’s see the rumored dual-core N8 variant with 12 megapixel camera and QWERTY touchscreen launch alongside the Nokia Sea Ray. Fresh devices and a fresh OS are what we consider the recipes for success — let’s get to baking.
