Nokia Q4 2009 results, smartphone world market share up 5%

Published by Rafe Blandford at 12:24 UTC, January 28th 2010

Nokia has released their Q4 2009 results, reporting an operating profit of EUR 1.141 billion, with net sales EUR 12 billion (down 5% YoY). Nokia's device and service division's profits were EUR 1.14 billion, up 130% year on year. Margins in devices and services were 14.9% (up 5.5% YoY and 3.5% QoQ). Converged devices sales (smartphone) were 20.8 million, compared with 15.1 million units in Q4 2008 and 16.4 million units in Q3 2009. As such, worldwide converged device ('smartphone') marketshare increased from 35% to 40% sequentially.

The results are significantly ahead of market expectations, with Nokia's share price up 10% since yesterday.

Olli-Pekka Kallasuvo, Nokia CEO, said:

"We grew our market share in smartphones in the fourth quarter, driven by the successful launch of new touch and QWERTY models. Our performance in smartphones, combined with continuing success in the emerging markets, helped us increase sales in our Devices & Services unit, both quarter-on-quarter and year-on-year. Our solid results also owe a good deal to world class supply chain management and impressive sales execution.

I was also pleased with Nokia Siemens Networks' performance in Q4, especially considering the ongoing challenging conditions in the infrastructure market. That performance enabled it to turn in a full year profit on an operative basis.

Our focus remains firmly on execution, especially around user experience. Here I want to highlight our move to shake up the navigation market with free walk and drive navigation on our smartphones, a good example of how we are leveraging our assets to bring real benefits to consumers."

Points of interest

Nokia mobile device volumes were 126.9 million units, and 12% year on year and up 17% sequentially (not unusual for Q4, which includes the holiday market). This is set against estimated industry volumes of of 329 million units, up 8% year on year and up 14% sequentially. Nokia's overall (phones) market share was 39%, up 2% from Q4 2008 and up 1% from Q3 2009. Average selling price was EUR 63, down from EUR 71 in Q4 2008 and up from EUR 61 in Q3 2009.
Services and software net sales were EUR 169 million, up 15% sequentially.
Converged device shipments (smartphones) were 20.8 million (up from 16.4 million in Q3 2009 and 15.1 million in Q4 2009), of which 4.6 million were Nseries and 6.1 million were Eseries. This means that 10.1 million smartphone shipments were numbered Nokia Symbian devices, reflecting Nokia's continued strategy of pushing 'converged' devices into the mid tier (e.g. the 5530).

This shows continued growth for Eseries sales driven by the advent of the E52, E55 and E72 mass market availability. Nseries devices sales remain relatively flat and are likely to included around 100,000 N900 (Maemo devices). Numbered devices also showed impressive growth against continuing good sales of the 5800 and the advent of the 5530.
Converged devices sales were higher than expected, with converged device (smartphone) marketshare up 5% from the previous quarter. Nokia converged devices sales growth has significantly out-grown the rest of the market.

Estimated global market volume was up to 52.4 million from 47 million, which means that of the 5.4 million extra smartphones sold last quarter 4.4 million were Nokias. However as we've mentioned before sequential figures do tend to be quite variable, due to the fact big individual launches can still have an impact on the relatively small smartphone market (52.4 million devices in Q4).

Nokia Smartphone Shipments over time

Nokia smartphone shipments over the last two and half years.

Notes from the conference call

Ovi Store Downloads up to 1 million a day. More than doubled number of Ovi Mail accounts to 5 million. Nokia Messaging deals signed with more than 69 operators. Comes with Music in 12 countries, supported by 25 operators.
Shipped almost 10 million touchscreen devices (or put another way more than 10 million non-touchscreen devices - of which 6.1 million are Eseries).
Additional Maemo device in H2 2010 (OPK 'product announcements continue to happen - Symbian and Maemo in H2 2010').
Question about Symbian/Maemo tablet - nothing specific - have been exploring with Booklet 3G, but more activity in this space. [my comment: really this is where Maemo operates - i.e. space between smartphone and laptops].

News Discussion

KPOM

This is good news for the company. They needed it. Where was the growth? Established markets, emerging markets, or both?

Unregistered

Share price up 10% !!!

Rafe

From the release:

Quote:

Our sequential market share increase was driven primarily by higher market share in Asia-Pacific, Middle East & Africa, Europe and North America. Our market share was sequentially down in Greater China and Latin America.

This is obvisouly overall, not just converged device. So it looks like it is good sales in Asia, Middle East and Europe that are mainly responsible

Unregistered

Operating profit increased 132% to EUR 1 141 million in Q4! There is NO "operating loss of EUR 426 million". It was in Q3.

Admin edit: Good catch, thanks. I think my copy and paste trigger finger got happy.

raffmonster

The Eseries has begun to set the pace in the industry(probably E71,E72) while the Nseries has have come down drastically, from Q3 '07 to Q2 '08 (N95;8GB all was well), from Q2 '08-Q1 '09(N96,N85,N79 lukewarm releases, N82 being the only saving grace), from Q1 '09 to Q4'09 (N97,N86,'97mini being let downs while N900 being only of questionable appeal)

Nokia's policies have made them lose loyal customers, I remember with what enthusiasm I bought N97,N85,N86 which later were,more or less, let down by one or the other issues.

What the Nseries needs right now is a device with all of the best of Nokia's features.Something as exciting, as Game changing, as a true multimedia experience, as my beloved N95(N82 if you might like).

Nokia, its time to unleash the bigger brothers of the N82 and the N95, they were fabulous devices,even without touchscreens, they chugged along without a hiccup,from doing everyday tasks to becoming the ultimate holiday companions.These phones ,literally sent my digicam packing. They, inadvertently, became an integral part of our lives.They were plastic,but survived being hit by solid metal, they looked flimsy, but they still worked even after we stepped on them.They were always reporting for duty,never faltered since the last 3 years.

Nokia,please do the needful.

I hope that the ongoing bad rep for Nokia be a passing phase and they do make a comeback with new devices instead of rehashed old-models.

Mr Mark

Quote:

Nokia's policies have made them lose loyal customers

Most people would be of the opinion that increasing your market share by 5% in the smartphone sector - which gows ever bigger - increases your number of customers.

Unregistered

"Nokia's policies have made them lose loyal customers"

And gain new ones.

Learn to read much?

Rafe

Thanks for pointing out that mistake. Apologies. A copy and paste mistake during some subsequent additions I think.

raffmonster

Quote:

Originally Posted by Mr Mark

Most people would be of the opinion that increasing your market share by 5% in the smartphone sector - which gows ever bigger - increases your number of customers.

You are in denial of the jarring truth. Smartphone sector will grow.Why didn't anyone notice the steep fall of the Nseries sales, well, they used to be Nokia's crown jewels before, don't you agree.

By loyal customers,I don't mean people who purchase Numbered/Xpress Music devices, The crowd is of those people who purchase Nokia 'premium' 500$ smartphones, phones like (N95,N82 and the like) and mod the hell out of them. Nokia released such a device, the N900, but at 800USD and a brick form factor, it is not the one to own, it just does not cut it.

Moreover,companies always tell the upside in press releases, otherwise, they are bound to lose share holders. I have no interest in Nokia's overall growth, it is just so monotonous now, they are the bigwigs in the phone market,atleast in the EU,Asia etc and posting they made profit is like posting Michael Schumacher won the F1 race.

They will make profit, the thing of interest is by selling WHAT type of devices, which will help prospective buyers get an idea of Nokia's forte and decide on a smartphone company that meets their needs

oniox

Quote:

Originally Posted by raffmonster

You are in denial of the jarring truth. Smartphone sector will grow.Why didn't anyone notice the steep fall of the Nseries sales, well, they used to be Nokia's crown jewels before, don't you agree.

By loyal customers,I don't mean people who purchase Numbered/Xpress Music devices, The crowd is of those people who purchase Nokia 'premium' 500$ smartphones, phones like (N95,N82 and the like) and mod the hell out of them. Nokia released such a device, the N900, but at 800USD and a brick form factor, it is not the one to own, it just does not cut it.

Moreover,companies always tell the upside in press releases, otherwise, they are bound to lose share holders. I have no interest in Nokia's overall growth, it is just so monotonous now, they are the bigwigs in the phone market,atleast in the EU,Asia etc and posting they made profit is like posting Michael Schumacher won the F1 race.

They will make profit, the thing of interest is by selling WHAT type of devices, which will help prospective buyers get an idea of Nokia's forte and decide on a smartphone company that meets their needs

The N900 is 800USD ?? - WRONG !! Its currently only $542 at amazon.com (unlocked sim free) and Dell even had it at sub $500 recently. I got mine for �349 here in the UK. Dont just write it off as another brick, it actually looks robust and UI is sleek like butter - you need to use one before making judgement. Its a knockout - IMHO the most powerful and best smnartphone out there (I have not tried the Google phone yet but this N900 baby is full blown Linux with full multitasking not some iToy). I cant wait for the Maemo6 device !!. As for pure smartphones, the 5800XM is the best all rounder (consider the free Ovi maps boost)

Its good to see that people are smarter than the pundits give them credit for - they want a phone with flash and decent camera, multitasking, bluetooth file transfer, good sound and speakers that wont cost the earth. Three yrs from now, iPad wielding Apple will be on the periphery of this game.

Unregistered

So it looks like Nokia is doing great in low-end smartphones and leaving high-end to other manufacturers. Too bad I do not care about boring phones with 240x320 resolution screens - that was interesting in 2005.... I hope the next flagship will not be similar to N96 or N97...

PS. I would also love removing so many warnings and messages in Symbian... I really do not need a message informing me, that "diverts are active" every time I make a call, and stupid message informing me, that I have connected the charger (I know that :-) or that I have disconnected the charger (I can see that without pointless warning on the screen).

Unregistered

Flagships are not everything. Even in other brands, only minority buys them. I do agree Nokia needs to revamp the Nseries, but still this is just going to be for show and not profits. A lot of these low to mid level smartphones $200-$300 does most everything the consumers need and want. Nut I understand that they are not for you because you want a "flagship". Let us hope Nokia does something about it . But in the mean time you cannot deny the fact that they are doing well with the other non-flagship phones.

snoFlake

As a shareholder I'm very pleased with my 10+% shareprice gain today giving me a 10% profit on my holding (guess where I bought'em yep been sitting on a scratch trade basically with few ups and downs since late Sep :tongue: ). The improvement/stabilisation in Nokia Siemens has helped a lot as large portion of previous figs was a write down against this unit.

The phone sales are a marked inprovement and my favourite products the cheap 5xxx series seem to have done v well as have the E series. I think the E series looks pretty safe at the moment and might even pick up some trade in the business field from RIM (although they're doing brilliantly in the youth market,wierd, and out reach to Apps developers) but obviously a market for qwerty driven devices even amongst the younger sectors. I'm not quite so complacent about the 5xxx/Xx as X6 seems a bit of a fumble and seeing some decent introductions from SE (Vivaz+qwerty cousin tba)at top end of this segment and at the bottom end touch screen feature phones from LG and Samsung are offering some pretty fierce competition but as a range it has done Nokia proudly through tricky 18months.

The standout concern there as others have pointed out is the performance of the N series which is (unsurprisingly) pretty poor having suffered dramatic fall very little sign oof recovery at the moment which is a pity because although lower in volumes margins are higher in the sector(R&D included) it also serves to drive mindshare for devices app ecosystems and importantly it has been the standout growth sector over the last 2 years. Now I hope going forward that Nokia's gamble on dominating the middle to bottom tiers play s off as the smartphone growth pushes down into these sectors as I'm 100% sure Nokia are right it will take off but they need to make sure that they're also the devices that people want/aspire to own not put up withh before they can move on, i.e. I think Nokia's play is good (that's why I bought share- seemed cheap at time compared to other phone manfs) but I hope they make sure they are on board it when it takes off unlike nGage which they called but made such a mess of it that Apple were the company that 's ended up dominating mobile gaming. Which is why the topend "Explorer" segment cutting-ish edge devices are important and why it's important that Nokia compete more effectively in this space I feel.

Unregistered

Why are people talking about "loyal customers" ? Loyal customers in this market are going to be the tiny minority. Most customers are walk up and buy what suits them with whatever promotion is on.

I have a Nokia, if a phone from another manufactuer suited me better then I would buy it. These are just phone makers, not hairdressers.

Unregistered

Quote:

Originally Posted by Unregistered

It is because some people are in such deep denial that they are wrong that they are scraping the barrel for a negative take on these positive results. There's always one twat.

Canberra

Nokia obviously have a clever strategy that goes far beyond the knowledge of the keyboard brave armchair evangelists who would have you believe that Nokia are doomed because they don't build a phone that they personally want.

Unregistered

"Nokia obviously have a clever strategy that goes far beyond the knowledge of the keyboard brave armchair evangelists who would have you believe that Nokia are doomed because they don't build a phone that they personally want."

Bullseye!

RogerPodacter

for all the people bashing the Nseries like the n97, remember, the only thing nokia has to do is give the n97 double RAM and a faster next generation CPU, and that thing suddenly turns into a powerhouse top-notch device. the n97 form factor is excellent, and the new n97 mini build quality is excellent. so its not like nokia is so far away that its impossible for them to turn things around in the high end Nseries. just 2 little things will make all the difference, cpu and ram.

Mr Mark

Quote:

Originally Posted by raffmonster

You are in denial of the jarring truth. Smartphone sector will grow.Why didn't anyone notice the steep fall of the Nseries sales, well, they used to be Nokia's crown jewels before, don't you agree.

And? It seems that people still buy Nokia smartphones.

Quote:

By loyal customers,I don't mean people who purchase Numbered/Xpress Music devices, The crowd is of those people who purchase Nokia 'premium' 500$ smartphones, phones like (N95,N82 and the like)

And the X6 CWM. Incidentally, hardly anyone pays '$500' for a Nokia phone on the bais that they come free with a contract. Most Nokia smartphone customers don't care if it's got an 'N' an 'E' or a numbe ron it.

*Pop*

That was the sound of your argument imploding.

Quote:

and mod the hell out of them. Nokia released such a device, the N900, but at 800USD and a brick form factor, it is not the one to own, it just does not cut it.

Wrong price. Subjective argument. Sorry, that doesn't cut it.

Quote:

Moreover,companies always tell the upside in press releases, otherwise, they are bound to lose share holders.

Such as increased share, EPS and ASP? Did you even think before you typed that?

Quote:

I have no interest in Nokia's overall growth, it is just so monotonous now, they are the bigwigs in the phone market,atleast in the EU,Asia etc and posting they made profit is like posting Michael Schumacher won the F1 race.

Then why are you posting here? Quite clearly you DO have an interest, you just appear to utterly wrong.

Quote:

They will make profit, the thing of interest is by selling WHAT type of devices, which will help prospective buyers get an idea of Nokia's forte and decide on a smartphone company that meets their needs

So, let's try this again...

Nokia, who do not sell an appreciable volume of smartphones in the US where growth is strong, still manage to increase global share by 5%. Does this mean:

a) More people are buying Nokia smartphones than last quarter.
b) Some load of tosh that you're going to pull out of your rear end.

Unregistered

wait till U8500 comes out with dual core A9 cortex which is under development and it will blow away the competetion

Unregistered

Quote:

Originally Posted by oniox

N900. I got mine for �349 here in the UK.

I have a credit card right here now and when you tell me where you got the N900 for that price, I will buy one without delay.

Unregistered

Quote:

Originally Posted by RogerPodacter

The N97i. Nokia used to do that all the time. People stopped buying some phones because they were waiting for the i version.

Nemoi

Interesting bit about almost 10 million touchscreen smartphones. That means that Nokia has also surpassed apple (8.7 million iphones) in that category.

What is really strange is the media bias and what that might do in the long term. Today, media in germany was full of iPad-stories, mostly written by tech enthusiats. If they reported on Nokia's gains, however, it appeared in the business section written by chart analysts. All of this gives people the impression that apple is the prime rules, which there are not - at least yet.

KPOM

This was a great quarter for Nokia, and there's no denying that. However, let's not get carried away here and declare that all is well. They clearly are selling more lower-end phones (look at the 'numbered' phones vs. N-Series). While their average selling price has stabilized, it is still lower than a year ago. What's happening is that the "dumb phone" market is being supplanted, slowly but surely, by the smartphone. It's no surprise. Even today's feature phones are more powerful than the smartphones of 2003. Nokia has the pieces of the puzzle in place, but they need to get it together and keep it together if they want to challenge in the high-end again. Symbian^4 and Maemo 6 can't get here quickly enough. Ovi Maps is now a "free" feature, so Ovi is still in need of a coherent strategy to generate software revenue. Plus, iPad creates a new question for Nokia. Should they or shouldn't they make an effort at this market?

Steve_R

I'm not too sharp with numbers, but am I missing something here?

Net Sales down 19.2% from 2008.

Operating Profit down 75% from 2008.

Operating margin was 10% in 2008, and then down to 3% in 2009.

How are these figures good?

Preparing to be corrected......

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