Nokia sales drop, but market share holds steady

IDG News Service - Nokia Corp. today reported first-quarter sales that were down about 27% year over year, as sales of mobile phones dropped below 100 million units.

Nokia sales for the first three months of 2009 were €9.3 billion ($12.3 billion U.S.), below analyst expectations of €9.7 billion. Profit was €4 million, compared to €1.2 billion a year ago.

The current environment is exceptionally tough, according to Nokia. Looking forward, it expects sales during the second quarter to be about the same or up slightly. Nokia also reiterates that sales volumes for 2009 will drop about 10% compared to 2008.

The company sold 93.2 million phones during the first quarter, a steep drop from the 113.1 million it sold during the fourth quarter of 2008.

Despite the drop, sales were still slightly higher than expected, according to Carolina Milanesi, an analyst at Gartner Inc. Although the market remains challenging, the good news is that it is showing some signs that it is stabilizing, she said via e-mail. She pointed to the fact that Nokia hasn't changed its outlook for 2009.

Nokia highlighted sales of the Nokia 5800 XpressMusic, which came in at 2.6 million units, as a bright spot.

Also, despite the sales drop, Nokia's market share was steady at 37% over the past two quarters, based on the company's estimates.

"The bottom line is that although sales were a bit better than anticipated, the strain on the market is clearly seen in the financial results with an average sales price that dropped," Milanesi said.