Nokia Q1 2010 financial results

Nokia’s Q1 2010 financial results just came out. Let’s run through them together shall we:

The company had 9.5 billion EUR of revenue, which is up 3% compared to last year, but down 21% compared to Q4 2009
The Devices and Services units had 6.7 billion EUR of revenue, up 8% year on year, down 19% compared to last quarter
107.8 million mobile phones sold, up 16% year on year, down 15% compared to last quarter
Of those mobile phones, 21.5 million were smartphones; that’s up 57% compared to last year, and up 3% compared to last quarter
Average selling price of all the mobile phones sold: 62 EUR, down from 64 EUR in Q4 2009
This is the first quarter I’m aware of that Nokia shows ASP for both voice only devices, and smartphones; note that the average S30/S40 device sold for just 39 EUR this quarter, and the average smartphone sold for 155 EUR:

Margins are continuing to slide for the Devices and Services units, down to 12.1% this quarter; up from 10.4% in Q1 2009, down from 15.4% in Q4 2009
Total cash and liquid assets on hand: 9.7 billion EUR

Other fun stats:

10 million people have downloaded the new version of Ovi Maps that offers free navigation
Nokia expects device unit volumes for 2010 to be up 10% compared to 2009
Nokia has reduced their target margins for the Devices and Services units; was previously between 12% to 14%, is now 11% to 13%
Here is a chart showing how Device and Service sales have changed, split by region. Note that year on year Europe is practically flat, Asia Pacific is down, and America is wayyy down:

Nokia’s market share is down to 33%, up from 32% in Q1 2009, by down from 35% in Q4 2009; note these are figures based on the new method of calculating industry volumes
Nokia estimates that 52.6 million smartphones shipped in Q1 2010, and using their numbers they now have a market share of 41%, up from 38% a year prior, and up from 40% last quarter
Here is a chart showing device shipments broken down by territory, compared to both last year, and last quarter:

Quote lifted straight from the press release: “Nokia is planning to deliver a family of smartphones based on the Symbian^3 software platform that is targeted to offer a clearly improved user experience, a high standard of quality, and competitive value to consumers. We plan to launch the first smartphone based on Symbian^3 during the second quarter 2010, with shipments expected during the third quarter 2010.”
The Ovi Store is filled with over 9,500 items, and is experiencing over 1.5 million downloads a day, with the average users downloading 8 items per month Update: During the call the number of downloads per day was increased to 1.7 million per day
There are now over 3 million Nokia Messaging accounts
There are more than 1 million people using Nokia Life Tools

And that’s that. The conference call is due to start in about 90 minutes, and I’ll listen to it, but will not be live blogging it. Any important data, usually shipment numbers for a particular model, will be added to the bottom of this post if they’re disclosed.

The huge drops in both sales and unit shipments between Q4 09 and Q1 10 are expected, seasonality and all that jazz, but for some strange reason Apple sold more devices in Q1 2010 than they did in Q4 2009. Using Nokia’s number of 52.6 million smartphones shipped this quarter, that would give Apple and their 8.75 million iPhones sold a market share of 16.6%.

Also note that the average price of a smartphone sold by Nokia in Q1 2009 was 190 EUR, and today it’s 155 EUR. That’s a drop of 35 EUR! Unit sales are down 30% quarter on quarter in Europe, meaning after Christmas almost no one purchased another device. Same can’t be said in China, where unit sales increased by 20%. Thank the Chinese New Year for that. In fact, China is the only territory where unit figures increased compared to Q4 2009.

Update: Reuters is saying Nokia is cutting prices by up to 10% to increase sales, and that the next version of Symbian has been delayed.

Update: Nokia said that in Q1 2010 they shipped 18 million devices with either a QWERTY keyboard or touch screen. That’s up 6% quarter on quarter, and 300% up year on year.

About The Author

Stefan Constantinescu

Stefan Constantinescu (@WhatTheBit on Twitter) has loved technology since as far back as he can remember. It started with computers, but in the past few years his passion has turned to mobile devices. As a mobile phone enthusiast who lives and breathes devices that connect to the internet, he knows he is not alone with this radical fascination of all things wireless. He is strongly opinionated and enjoys a good debate so leave comments in his posts and he’ll get back to you! Stefan began blogging as a hobby in the fall of 2006 and joined IntoMobile in the summer of 2007. Later he got a job at Nokia in March 2008, but as of June 2009 he has rejoined the IntoMobile team. He is currently based out of Helsinki, Finland.

ouais

Nokia has slept when Apple and Google has launched their OS. They deserve their defeat. Nokia have to wake up before their stop their business
name

you are so blinded by your hate towards Nokia that you did not noticethat
- Apple share in smartphone market is stable Q1 2010 Vs Q4 2009
- while Nokia shares INCREASED from 39,7% to 41 %

so who is performing better ???
- Marin Perez
  
  Trust me, Stefan has more love in his heart for Nokia than anyone else on tech blogs. Market share is an important thing to track, but it also depends on how you count it. If they’re including S40 devices as smartphones, which they technically are, that’s kind of disingenuous. Additionally, if Apple has 50%+ profit margins on its handsets vs 15% for Nokia, Apple could be performing better.
  
  Look, I love the folks from Nokia and think they’re smart and have a good plan going forward. But you cannot honestly say they haven’t been left behind in terms of innovation over the last few years. Part of it is the structure of a huge, entrenched company, but it’s true, nonetheless.
  - hary
    
    Sometimes, one has to express his/her love than just keeping it in the heart! IF someone loves someone so much, then it’s hard to keep it just in the heart than to express it sometimes, even though slight!!
    - Marin Perez
      
      Haha, you’re probably right. I still say Stefan calls it like he sees it.
      - hary536
        
        Yeah hopefully, but when he calls it, i don’t see any love in it!!
  - enyibinakata
    
    @Marin, I agree that Stefan has a soft spot for Nokia. He is the sort of guy Nokia needs to listen to right now. Nokias recent efforts are not promising. Hopefully meego and symbian 3 will help turn things around. I love my 5800 though. Sounds better thn iphone and is tough as old boots. I am typing. This with it.
    - name
      
      “Nokias recent efforts are not promising”
      
      I would disagree
      
      There are areas where nokia needs to work harder (like mainstream smartphones)
      
      burt there are areas where thay are superb
      - I would just mention pocketable PC or microcomputer if you prefer to call it that way – N900 with Maemo 5 which is by far the best OS for pocketable devices (with a usability of real PC)
      - I would also mention free GUIDED navigation on majority (and soon all) Nokia smartphones
      list is longer but those 2 are most obvious
  - name
    
    s40 is NOT and never was a smartphone and is NOT counted as such
    18 mln units out of 21,5 mln smartphones sold are touchscreen of qwerty devices – so they are real smartphones and micro computers (like N900)
    
    “if Apple has 50%+ profit margins on its handsets vs 15% for Nokia, Apple could be performing better.”
    - first of all your figures are not 100% acurate:
    - apple gross margin is 41,7%
    - nokia gross margin is 32,5 and this includes margins on cheap devices – no one (appart from Nokia guys) have an idea what is a margin on Nokia smarthones so please compare comparable figures
    
    ps. by the way – I wonder how must feel people buing old-fashion iphone knowing how much they are overpaying
hary536

Here is something imp. which most people have ignored to see after today’s results. Below is the excerpt from Q&A session during the analyst call. Nokia has not delayed but shifted purposely and i think that was a business decision to give Symbian^3 more exposure to the market rather than releasing Symbian^4 one quarter after Symbian ^3, else people would delay buying Symbian ^3 when they come to know that Symbian^4 is on the horizon. I personally think that it was a better business decision to shift Symbian^4 to 2011.

*****************************
Phil Cusick – Macquarie

As I think about Symbian^3 being delayed, can you talk to me about why then are you delaying Symbian^4? Are you taking talent off of the sort of 4 process and putting it on 3 so the 4 development process is delayed? Then what’s your plan around the hardware that was going to be on Symbian^4?

Do you think you still launch the same, hence that’s on the same timing but some will be enabled with Symbian^3 instead of 4 sort of late this year or next year? Or do you delay there?

Then just a quick follow-up; there’s some chatter that ARM could be acquired by Apple. I wonder if you have any thoughts on that and how that might impact you.

Timo Ihamuotila

Yes, we in fact believe, looking at the market conditions here, that the Symbian^3 – sorry, I’ve been coughing for five weeks now and I’m losing my voice a bit. Sorry about that.

We really believe the Symbian^3 will be competitive not only this year but going forward next year as well. This is really a sort of an optimization point of view. When do you take what type of versions to the marketplace and how?

Looking at what we can do with Symbian^3, during the last part of the year bearing in mind the MeeGo investment as well, we really don’t feel we are in a position where we really would need Symbian^4 this year.

So in that way it really is a lot like sort of how to make the market calls in the best possible ways. I don’t want to take stand to the hardware side here because it relates to choices between different windows. I don’t think I’m in a position to do that.

I think in fact [QuoCom] in yesterday’s call didn’t go anywhere when they got the same type of question from their investors. This ARM, Apple, I really am not in a position to have an opinion on that.