Olli-Pekka Kallasuvo, Nokia CEO, said:
"In recent weeks, the macroeconomic environment has deteriorated rapidly, with even weaker consumer confidence, unprecedented currency volatility and credit tightness continuing to impact the mobile communications industry. We are taking action to reduce overall costs and to preserve our strong capital structure. This is clearly our top priority in the current economic environment. However, it is important for Nokia to continue investing at the proper pace in future growth. We believe Nokia has a tremendous opportunity to capture value as the Internet services market evolves and grows. Being a catalyst for change has been our heritage and it will be our future."
Points of interest:
- Net income was EUR 576 million, down from 1,825 million in Q4 2007. Analysts had expected income of around EUR 970 million and sales of around EUR 13 billion. Thus results were poorer than expected, albeit within the range of some estimates.
- Nokia mobile device volumes were 113.1 million units, down 15% year on year and down 4% sequentially. This is set against estimated industry volumes of of 305 million units, down 9% year on year and down 2% sequentially. Nokia's market share was esitmated at 37%, down from 38% in Q3 and 40% in Q4 2007. Nokia expect a similar market share in Q1 2009, but is targeting an increased market share for later in the year.
- Services and software net sales of EUR 158 million, up 37% sequentially. This sends a positive message about Nokia's service strategy, although it is early days given the amounts of money being invested in this area.
- Eseries sales were good (same as previous quarter), especially given a 12% decrease of Nseries device from last quarter. This is a reflection of the success of the Nokia E71 for which Q4 was its first full quarter. Falling Nseries sales probably reflect increased competition from Apple, HTC and others in addition to the market conditions.
- There's a note of a EUR 1.7 billion one-off payment to Qualcomm relating to the patent and license agreements that were recently reached.
- Nokia's reduced sales and market share was largely driven by the Middle East and Africa, Greater China and Asia-Pacific markets. This was partly offset by increased market share in Europe and Latin America.
Nokia noted that 'due to extreme currency volatility, our market share in the fourth quarter 2008 in some geographic areas may have been affected by products being re-routed by the distribution channels for sale to consumers in other geographic areas, particularly in Europe and Middle East & Africa'.
Nokia Mobile Device Volume by Geographic Area:
(million units) Q4/2008 Q4/2007 YoY
Europe 34.7 37.2 -6.7% 27.4 26.6% Middle East & Africa 18.2 23.6 -22.9% 21.5 -15.3% Greater China 12.9 20.2 -36.1% 19.8 -34.8% Asia-Pacific 29.9 34.0 -12.1% 33.6 -11.0% North America 4.1 5.1 -19.6% 4.5 -8.9% Latin America 13.3 13.4 -0.7 11.0 20.9% Total 113.1 133.5 -15.3% 117.8 -4.0%
- The average device selling price was EUR 71, down from EUR 72 in Q3. Devices and Services gross margin was 33.8%, down from 36.5% in Q3 2008. These reflect a greater proportion of lower cost devices being sold.
You can read the full results here.