Nokia bullish on smartphones despite poor results

Nokia has reported a 66 per cent drop in profits

Nokia is remaining upbeat, despite second-quarter financial results that showed falling orders and a 66 per cent drop in profits.

The company reported that sales revenues were down 25 per cent, and handset shipments fell 15 per cent, indicating heavy discounting on prices. However, the company did say that sales were up on the last quarter, indicating that the worst may be over.

One bright spot in the report was that Nokia has increased its lead in the smartphone market, the most lucrative end of handset sales. The company's market share was up three points to 41 per cent.

"Nokia put in a solid performance in what was another tough quarter. Competition remains intense, but demand in the overall mobile device market appears to be bottoming out. As before, we are continuing to tightly manage our operating expenses," said Nokia chief executive Olli-Pekka Kallasvuo in a statement.

"We are balancing short-term priorities with our longer-term growth ambitions as elements of the mobile handset, PC, internet and media industries converge to form a new industry.

"Consumers will increasingly expect devices and services designed as integrated solutions. To capture this opportunity we are accelerating our strategic transformation into a solutions company."

Nokia will also ramp up its promotion of the Ovi store, according to Dr Tero Ojanperä, the company's executive vice president of services. The company will be making new announcements on 2 September about development tools for Ovi, and will begin a major marketing push for the site.

"We will be kicking in for the Ovi store to get a bigger marketing push," he said. "This includes integrated billing with 27 operators and localising it in five languages. We've made good progress but have small details to iron out before the big push."

Ojanperä added that Nokia's smartphone market share is very good news, since it is the most important market for handsets in the future. While there is strong growth in the developing world at low-end firms, smartphones are the future for more developed markets.