All the bad news,
Nokia smartphones dumb down profits
Nokia releases Q2 2010 results; profits down, market share flat
Nokia Q2 2010 results – profits down but smartphone sales up
So lets do a reality check on the facts; Nokia profits are Down 40%, but are still making a Profit. Which means they are in the green economically, and are making a Profit of €221M Euros (285M$). But 40% less than last quarter, meaning that they are only making 60% of the profit they made last quarter, during the worst recession in over 100 years And everyone is complaining?
The only thing this tells me, is that a manufacture like Apple who makes more profit on their iPhone 4, is ripping off their customers by charging a premium price for a Smartphone and Nokia does not!
The problem is that through mismanagement, Nokia has slipped from being the #1 in the world to being a joke. They shipped 111 million handsets (of varying capabilities) last quarter but only made a profit of 227 million Euro? That’s 2 Euro per handset profit? Nothing to crow about. In fact, that’s disastrous. Apparently their profit margin is around 3.5%?
Lest we forget – Nokia are a business and with a profit margin like that they’re not going to be able to substantially invest in the future or weather the recession much more. They’re also on the lookout for a new CEO because although they have made profit, they’re on their last legs.
Economics is easy. You price your product at what the market will bear. You claim Apple is ripping people off but even at these high prices they’re selling them as fast as they can build them. Nokia’s profit drop indicates that not only are they not persuading many people to buy but less people are valuing their product than last year. And what are they doing to fix this?
I’ve offered to take over as CEO by the way. They need some visionary leadership.
All true, but how many companies are in the Red this year? More than we will ever know. That fact that there IS a market for 111 Million handsets, and that most WILL NOT be filled by Apple, tells a lot also.
I’d take that slot at Nokia also, or even consult, if ask. In any case they need to ‘talk it up’ more about their products, and have the courage of their convictions when it comes to supporting them.
Better yet, I can help Apple design a better Antenna for the iPhone 5. 🙂
Nokia are in terrible shape. They need leadership and vision before they run out of cash. They remind me of Apple in the ’90s – desperately desperately in need of leadership.
They really do, I agree, but they really need to decide what they are going to do and then have the courage and commitment to carry it out. Leadership would be good, but their ‘culture’ is the problem, their decision making by committee is the problem.