In looking at Nokia's 1Q financial results
today, I noticed something interesting. Its N Series "multimedia computers"
are separated from its regular mobile phone business in terms of performance. While Nokia posted a 5% drop in earnings from its mobile phones, it saw a 28% increase in earnings from the "multimedia computers." Maybe that's in part due to the N95's $750
(550 euro) sale price.Overall, the Espoo, Finland-based company saw sales rise 4% from $12.89 billion to $13.87 billion. Profit, however, was down 7% from $1.86 billion to $1.72 billion. Nokia saw losses in its mobile phone unit (a 14% drop from $1.47 billion to $1.27 billion), and networking unit (a 48% drop from $202 million to $106 million). Operating margins also saw mixed results, with the mobile phone business dropping from 18.5% to 16.8% and the multimedia unit seeing a minor increase.
That Nokia breaks the N Series devices, which includes the N95, GPS products, the N800 Internet tablet, and N-Gage, into its own unit clearly shows that Nokia considers them to be more than just phones.
There's no doubt that über-devices like the N95 take the mobile phone to the next level. Including built-in GPS, 5-megapixel cameras, and marrying key features to the mobile Internet gives us a small peek at what mobile devices of the future will be like.
Still, the 14% drop in profits in Nokia's mobile phone business, which is its bread and butter by far, shows that Motorola isn't the only company feeling the pinch from the fierce price competition in the industry.