Nokia announced that the competitive dynamics and market trends across multiple price categories, particularly in China and Europe will affect its revenue during the second quarter.

 

 

A product mix shift towards devices with lower average selling prices and lower gross margins and pricing tactics by Nokia and certain competitors are also adding pressure on revenues.

 

 

Nokia is expecting Devices & Services net sales to be substantially below its previously expected range of EUR 6.1 billion to EUR 6.6 billion for the second quarter 2011. This update is primarily due to lower than previously expected average selling prices and mobile device volumes.

 

 

Nokia expects Devices & Services non-IFRS operating margin to be substantially below its previously expected range of 6-9 percent for the second quarter 2011. This is due to lower than previously expected net sales.

 

 

Given the unexpected change in our outlook for the second quarter, Nokia believes it is no longer appropriate to provide annual targets for 2011. However, Nokia expects to continue to provide short-term quarterly forecasts in its interim reports as well as annual targets when circumstances allow it to do so.

 

 

The mobile major is taking immediate action to address the issues that are impacting its Devices & Services business. Nokia’s high-level strategic objectives and targets remain unchanged.

 

 

Nokia is continuing to invest to bring new innovative capabilities to its Symbian line up. In addition, Nokia has taken price actions on its current smartphone portfolio, and Nokia is intensifying its focus on retail point-of-sales marketing.

 

 

The company started shipping its new dual-SIM devices last week.

 

 

Nokia remains pleased with its progress on its Windows Phone strategy, and has increased confidence that the first Nokia product with Windows Phone will ship in the fourth quarter 2011.

 

 

Nokia remains committed to its target to reduce its Devices & Services non-IFRS operating expenses by EUR 1 billion for the full year 2013, compared to the full year 2010, and plans to implement these reductions as quickly and effectively as possible.

 

 

Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition,” said Stephen Elop, president and CEO of Nokia. Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011.”

 

 

By TelecomLead.com Team
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