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Nokia lowers third quarter market share projection

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Nokia on Friday lowered its projected market share for the third quarter..

Nokia, the world's largest mobile phone manufacturer, on Friday said it expects its device market share to be lower in the third quarter than it was in the second.

In a statement released by the Finnish mobile device giant, Nokia said its refusal to play in mobile phone price wars brought about by the weak economy could work against its market share this quarter.

Nokia, which has more than one billion users worldwide and manufactures and sells 1.5 million handsets per day, predicted Friday that third-quarter market share would be lower than the 40 percent it had in the second quarter. Originally, Nokia had predicted its share would remain consistent.

Despite the expected third quarter drop, Nokia said it plans to increase its market share in mobile devices for all of 2008.

"Nokia expects the overall mobile device market in 2008 to be impacted by the weaker consumer confidence in multiple markets," the device maker said Friday. "However, Nokia continues to expect industry mobile device volumes in 2008 to grow 10 percent or more from the approximately 1.14 billion units Nokia estimated for 2007. Nokia also continues to expect industry mobile device volumes in the third quarter 2008 to be up sequentially."

While Nokia's lack of participation in price wars is the key reason for its turnaround, Nokia added that overall market competition will also play against its third quarter results.

"Nokia's current estimate that its mobile device market share in the third quarter 2008 will be lower than previously expected is due to multiple factors," Nokia said. "These factors include Nokia's tactical decision to not meet certain aggressive pricing of some competitors, the overall market competition, including the entry markets, and the temporary impact of a slower ramp-up of a mid-range Nokia device. Nokia's strategy is to take market share only when the company believes it to be sustainably profitable in the longer term. Nokia has not broadly participated in the recent aggressive pricing activity -- as it believes that the negative impact to profitability would outweigh any short term incremental benefits to device unit sales."

Regardless, Nokia said it expects product launches to remain on track throughout the rest of the third quarter and into the ever-important fourth quarter.

Nokia is expected to report its third quarter results on Oct. 16.

See original article on CRN.com

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