THE WRAP: Nokia slips behind Apple; Operators feel pinch in 2Q

Michael Carroll
22 Jul 2011
This was the week when Nokia was finally toppled from the top of the global smartphone market by Apple, amid a slew of second quarter results that reveal tough trading conditions for all.
Nokia yesterday confirmed it is no longer the market leader in smartphones, with shipments of 16.7 million units in 2Q11 some 3.64 million lower than Apple’s iPhone shipments in the three months to June 25 – its fiscal 3Q11.
The Finnish vendor swung to an operating loss of €487 million ($701 million) from a profit of €295 million in 2Q10. An €890 million fall in profit at its devices and services division is the culprit – offsetting a reduction in losses at Navteq and Nokia Siemens.
Nokia wasn’t alone in felling the pinch during the second quarter. Rival Sony Ericsson also swung to a loss during the period, as supply chain shortages impacted shipments to the tune of 1.5 million units. That left the vendor’s shipments down 31% to 7.6 million devices year-on-year.
Operators weren’t immune to the profit falls, with Malaysia’s DiGi seeing depreciation costs and one off charges wiping 15% off its quarterly income. Profit for the quarter fell to 278 million ringgit ($92.7 million), despite 10% higher revenues.
Norway’s Telenor suffered the same fate as DiGi, though arguably from the other side of the coin. The operator’s post-tax profit more than halved year-on-year to 4.4 billion Norwegian kroner ($814 million), but the figure was skewed by gains from a share sale in 2010 that artificially inflated the firm’s 2Q10 profit.
The operator maintained its guidance full year 2011 guidance of at least 5% organic growth in revenues and an EBITDA margin of 31%, as net subscriber additions of eight million contributed to an 800 million kroner rise in revenues during the quarter.
Networking firm Ciena is more focused on current earnings, revealing a contract to deploy what it claims is Eastern Europe’s first 100G network. The firm will deploy 450km of compatible cable for the Romanian Educational Network, which is expanding its current 4,200km of optical infrastructure.


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