Nokia Optimistic Despite Drop In Profits

Nokia saw a 30% drop in net income, but its outlook for the fourth quarter may soothe those worried about the economic slowdown hitting the mobile industry.
Nokia saw its third-quarter revenue and earnings drop, but the company said it expects the overall industry to be up for the next quarter.

The company saw its net income fall to $1.47 billion, down 30% from $2.1 billion for the same period last year. Sales were also down, hitting $16.4 billion. Like every phone company, Nokia has been feeling the pinch from the economic slowdown, and it also faced sluggish sales in Europe and the United States.

The phone manufacturing giant did ship 117.8 million phones in the quarter, a 5% increase year over year but a 3% decrease from last quarter. It also saw a dip in overall market share, going from 39% to 38%.

The drop was not unexpected, as the company warned it may lose market share in certain areas because it didn't want to engage in price-slashing like its rivals were.

"When we spoke about the aggressive competition in the third quarter, we decided tactically not to participate in the price competition," said CEO Olli-Pekka Kallasvuo in a conference call. "We have a responsibility as the market leader, when the market leader moves, the market moves."

Despite the decreases, Nokia's outlook for the industry as a whole may soothe some who fear dramatic dips in the mobile industry. The world's largest cell phone manufacturer said it expects the cell phone volume to be up sequentially.

The company also said there were 44.2 million smartphones shipped in the third quarter, an increase from 31.7 a year ago. Nokia said it is well-prepared to capitalize on this increasing market with the upcoming release of the touch-screen 5800 XpressMusic, as well as its N and E Series smartphones.