Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

Summary: Nokia cut its second quarter and 2011 outlook as it struggles to fend off competition and is watching average selling prices for its devices tank.

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Nokia on Tuesday cut its second quarter and 2011 outlook as it struggles to fend off competition and is watching average selling prices for its devices tank.

Conditions have unraveled for Nokia so quickly that the company said it can't give 2011 forecasts.

Also see: Nokia, RIM: Sidekicks walking through the valley of the shadow of death

These phones aren't selling.

The problem: Nokia is in limbo as it tries to sell Symbian based devices ahead of Windows Phone 7 devices in late 2011 and early 2012. Nokia confirmed that it will ship a Windows Phone 7 device in the fourth quarter. What's unknown is whether that device will be enough to salvage 2011 and give Nokia some confidence about 2012. In any case, Nokia is betting everything on Windows Phone. In the meantime, the company needs to sell you a few Symbian devices.

Nokia CEO Stephen Elop said:

"We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition. 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."

In a statement, Nokia said that its devices and services unit will produce second quarter sales "substantially below its previously expected range of EUR 6.1 billion to EUR 6.6 billion for the second quarter 2011." Nokia said device volume is lower than expected and average selling prices are tanking.

Second quarter operating margins, which were already cut before, are now expected to "substantially below" the 6 percent to 9 percent range for the second quarter. Device sales are looking weak and Nokia said its operating margin "could be around breakeven."

For the year, Nokia said "it is no longer appropriate to provide annual targets for 2011."

As for fixing the situation, Nokia said it is working to add capabilities to its Symbian portfolio to boost sales. The problem with Symbian is that Nokia will move on to another OS soon. Nokia said it will up its retail marketing.

The company has already restructured, but more layoffs could be on tap given the severity of the outlook.

Related:

Nokia cuts 4,000 jobs; Symbian developers to land at Accenture

Topics: Nokia, Enterprise Software, Microsoft, Mobility, Operating Systems, Software, Windows

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77 comments
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  • I think

    This is going to end up one of two ways.<br><br>This is going to be one of those huge able to turn the Titanic at the last moment and avoid the iceburg and instant runaway success...<br><br>or<br><br>it is full steam ahead into the iceburg and sinks very quickly.<br><br>I don't think there is any middle ground with Nokia's decision to only use Windows Phone 7.
    dragosani
    • Let me guess

      @dragosani You own a iPhone, you own a iPad, you own a iMac. Which basically means, you have no credibility on this topic, since you views would be considered biased.
      Mr. Dee
      • re: Let me guess

        @Mr. Dee <br><i>"You own a iPhone, ..."</i><br><br>The odds of him owning a WP7 was slim to non, right?
        Return_of_the_jedi
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Mr. Dee
        And you are a Windows apologist, so your have the same credibility as the poster you are referring to.
        Rick_K
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Mr. Dee

        I have to agree. Either it will be a success or it will be another Palm. Gartner is predicting that it will be a success, surpassing iphone market share by 2014. I am reserving judgement based on what I see out of Mango.
        Your Non Advocate
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Mr. Dee
        That means he is i-Naive
        mikroland
      • What Sense Does Your Reply Make?

        @Mr. Dee
        He just predicted that there will be no middle ground of success for Nokia here. He thinks it will be either a runaway success or a dismal failure.

        How does that position gibe with what you said? He didn't say it would fail. He just said he doesn't think there will be any such thing as partial success for the new phone. I don't know if he'll turn out to be correct, but it doesn't really indicate bias.
        CFWhitman
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Rick_K : hey fool, "Mr. Dee" didn't say anything about the topic. Try to learn to read before spitting your crApple defenses.
        nomorebs
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Mr. Dee

        I own Android phone and Linux, so I say no to icrap and winshit. :>
        pawlerson
    • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

      @Return_of_the_jedi I don't own an iPhone, an iPad, or an iMac; as a matter of fact, I'm using a PC, a Netbook, and an Android phone. But I actually think Nokia/Win Phone 7 will hit that iceberg and sink fast as well. Don't think it has a snowball chance of becoming an "instant runaway success" though...
      Socratesfoot
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Socratesfoot Let me play too! I don't own an iPhone, iPad or iMac; I left XP for openSUSE Linux, and my little Nokia flip phone is dumber than Snooki (and has 10MB storage space with no card slot).

        I believe that the world's largest cell phone hardware manufacturer and world's largest OS developer will ultimately do very well (just like all the major analysts predict). Nokia never stopped making great hardware, and Microsoft has made huge strides in a short period of time with WP7 plus has a large number of ecosystem tie-ins (XBox, Office, desktop Windows, etc.). The fact that Windows 8 will run on ARM leads to the possibility of a future OS convergence and the dream of running desktop software on a phone-size device (which would be reality now if manufacturers would just make MIDs, dangit!).
        jgm@...
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Socratesfoot

        Yup, its like trying to save a sinking ship by throwing it an anchor. While Nokia is a good maker of cell phones WP7 has been pretty unimpressive at best. The next big release of WP7 with 500 new features will most likely be incomplete, buggy and frustrating based on MS past history. This is not the game changer that will over turn Apple or Android. MS will throw money at it to keep it alive and some MS zealots and Apple haters will embrace it but I don't see the general public moving to it. Think of the Zun and you will see the future for WP7.
        Kabcock
    • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

      @dragosani : It was actually while turning that Titanic sank. Had she chosen to collide head-on with the 'berg it probably would not have sunk.
      Lord_of_the_Singhs
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Lord_of_the_Singhs
        Emanuel Kant explored this topic and came to antipodes with you ...
        desilvav
      • Figure of speech...

        @Lord_of_the_Singhs

        is a figure of speech.

        :)

        If the RMS Titanic had it head on it may not have been any better off.

        http://www.sciencedaily.com/releases/1997/12/971227000141.htm
        dragosani
    • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

      @dragosani I'm hoping for success. There need to be more WP7 options. To date most of the WP7 hardware has been kind of eh. And eh doesn't generate much excitement with consumers.
      StupidTechZealots-23432415690276115908309621553360
      • It is going to be interesting

        @Stocklone

        Either way it I think it is going to be fascinating to watch. If it does become a success they will finally get that American market they have struggled with.
        dragosani
  • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

    The number of people holding out for WP7 on Nokia says quite a bit about both companies. Sure the numbers are down now for the hold out, but come Q4 when they release their first WP7 those numbers should rise significantly.
    LoverockDavidson
    • More nonsense?

      @LoverockDavidson<br><br>"The number of people holding out for WP7 on Nokia"?<br><br>Did you just pull that one out of your backside or can you provide a credible link?

      Edit: Or is it you and all your imaginary friends?
      Economister
      • RE: Nokia: 2011 going from bad to worse; Windows Phone 7 device in Q4

        @Economister
        If you had read the same story I did you could see what it was really saying. Nokia sales are down right now until WP7 starts shipping on them. Its not a hard concept to understand.
        LoverockDavidson