Net profit for the second quarter at $1.4b, up 43%.
Growth in developing markets boosted profit for Nokia, despite a significant dip in sales to North America during the second quarter, the number one mobile phone handset maker said Thursday.
Growth in developing markets boosted profit for Nokia, despite a significant dip in sales to North America during the second quarter, the No. 1 mobile phone handset maker said Thursday.
Nokia’s net profit for the second quarter was €1.1 billion ($1.4 billion as of June 30, the last day of the period reported), up 43% over the same quarter last year. Net sales grew 22%, reaching €9.8 billion compared to €8 billion during the second quarter in the previous year.
Nokia shipped 78.4 million phones, an increase of 29% compared to the year-earlier period. But tough competition from phone makers like Motorola, with its popular Razr phone, forced Nokia to give up a percentage point in market share since the start of the year. Nokia said it had 34% of the market, compared to 35% in the first quarter this year. Nokia’s share is up compared to a year earlier, when it had 33% of the market.
Nokia is selling an increasing number of phones to developing markets. It increased phone sales to China by 58% in the quarter compared to last year, 79% in Asia-Pacific and 39% in the Middle East and Africa. Nokia and other mobile phone companies say that as markets in Europe and North America saturate, they plan to sell more products to markets with emerging wireless industries.
Growth in those new markets made up for a big drop in sales to North America. Nokia sold 13.3% fewer phones to North America during the quarter compared to the same quarter last year. That decline was caused by the cancellation of an order from a customer for prepay phones, Nokia said.
The shift in sales to emerging markets is beginning to affect the average price of phones. During the quarter, the average selling price of phones sold by Nokia dropped to €102, down from €105 in the same quarter last year.
Nokia slightly improved the performance of its enterprise solutions group, one of the few sore spots reported by the company during its first quarter results. Second-quarter sales for this group, which only recently began selling the enterprise-focused Eseries phones, increased 43% to €283 million. The enterprise group’s operating loss for the quarter was €63 million, compared to €76 million in the second quarter last year. The Eseries phones aren’t expected to ship in volume until later this year.
Nokia’s rival Motorola on Wednesday reported strong profit for the quarter and record shipments of handsets. Motorola said its handset market share rose more than a percentage point compared to the first quarter, to 22%.
