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Nokia profits plunge as smartphone sales rise 1%

Smartphone sales and currency movements helped Nokia report a 1% rise in sales to €10bn for the second quarter of 2010, but operating profit plunged 15% to €660m, year on year.

Nokia CEO Olli-Pekka Kallasvuo, who faces growing pressure to resign, said the company ended the quarter with reasons for optimism, despite the pressure on margins caused by an average selling price €1 lower at €62 and sales 8% higher at 111m units.

"For one, the global handset market has continued to grow at a healthy pace, led by some of the less mature markets where Nokia is strong. We are also encouraged by the solid second quarter performance of our mobile phones business, helped by an improving line-up of affordable models," Kallasvuo said.

He said the Nokia N8, the first to use the Symbian3 operating system, would be closely followed by more Symbian3 devices. S3 would provide a user experience superior to that of any smartphone Nokia has created, he said. "This will kick-start Nokia's fight-back at the top end of the market," he added.

Nokia is presently awash with mobile operating systems. It is repositioning the Symbian-based devices for the low to middle market, including machines like smart meters. It is using the Linux-based Maemo for tablet/netbook-like devices, whiles it develops MeeGo with Intel for high end smartphones and other mobile devices.

It has just bought most of Motorola's wireless infrastructure business for $1.2bn and must still consolidate the acquisition. The deal gives Nokia a bigger footprint in the US, but it is already running behind Ericsson in supplying the next generation mobile infrastructure equipment based on Long terms Evolution (LTE).


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