Wednesday, December 3, 2008

Nokia Again Trims Forecast

Citing weakening consumer spending worldwide, Nokia again trimmed its forecasts for 2009. A previous warning had been issued on 14-November-2008. While noting the extremely limited visibility, Nokia expects 2009 industry mobile device volumes to decline 5% or more from 2008 levels. Nokia said the mobile device market slowdown has continued more rapidly than previously expected due to a global consumer pull-back in spending, currency volatility, and decreased availability of credit.


The company held its annual Nokia Capital Markets Day and issued guidance for all its major sectors. Some highlights:

  • Nokia now estimates that fourth quarter 2008 industry mobile device volumes will be lower than the previous estimate of approximately 330 million units, which would result in full year 2008 industry mobile device volumes below the earlier estimate of 1.24 billion units.


  • Nokia believes there is insufficient visibility in the marketplace to confirm its prior estimate for its fourth quarter 2008 mobile device market share, which was expected to be at the same level or slightly up from an estimated 38% in the third quarter 2008.


  • Nokia and Nokia Siemens Networks continue to expect the mobile infrastructure, fixed infrastructure and related services market to be flat in euro terms in 2008, compared to 2007.


  • Nokia and Nokia Siemens Networks continued cost synergy target for Nokia Siemens Networks is to achieve substantially all of the EUR 2.0 billion of targeted annual cost synergies by the end of 2008.


  • Nokia expects that the mobile device market will continue to be negatively impacted by the effects of a slowdown in consumer spending. Nokia also expects that operator and retail distribution channels will go through a period of destocking, resulting in lower sales volumes by manufacturers (sell-in) than purchase volumes by consumers (sell-through) for the industry in the first half of 2009.


  • Nokia expects the four billion mobile subscriptions mark to be reached in the first quarter 2009.


  • Nokia targets an increase in its market share in mobile devices in 2009 compared to 2008, including increased share in smartphones.


  • Nokia has adjusted its Internet services market focus to the areas of music, maps, media, messaging and gaming. Nokia estimates these targeted portions of the Internet services market will be approximately EUR 40 billion in 2011. In December 2007, Nokia estimated that the total Internet services market would be approximately EUR 100 billion in 2010.


  • Nokia targets Services & Software net sales of EUR 2 billion or more in 2011.


  • Nokia targets its Services & Software business to have 300 million unique services users by 2012.


  • Nokia and Nokia Siemens Networks preliminary estimate is that the mobile infrastructure, fixed infrastructure and related services market will decline 5% or more in euro terms in 2009, from 2008 levels.


  • Nokia and Nokia Siemens Networks target for Nokia Siemens Networks market share to remain constant in 2009, compared to 2008.


A 344 page presentation, along with hours of archived video from the Nokia Capital Markets Day, is posted on the company's Investor Relations webpage.http://www.nokia.com
  • On 14-November-2008, Nokia issued financial guidance for its fourth quarter 2008 and full year 2009, saying that the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending including for mobile devices. Nokia said the mobile device market has also been negatively impacted by the more limited availability of credit, which has limited the purchasing ability of some of its trade customers.


    As a result, Nokia now expects that the industry mobile device volumes will be lower in the fourth quarter 2008 than previously anticipated at approximately 330 million mobile devices. This is sequentially up from the estimated 310 million in the third quarter of 2008. This would result in a current estimate of industry mobile volume of 1.24 billion in 2008, instead of the earlier estimated 1.26 billion units, up from 1.14 billion units Nokia estimated for 2007. Nokia said it continues to expect its mobile device market share in the fourth quarter 2008 to be at the same level or slightly up, sequentially.

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