Some much-needed good news from Nokia, which reported gains in mobile market share and a 65 percent increase in profits for Q4.
Net profits were €948 million ($1.3 billion), compared to €576 million ($806 million) for the same quarter a year ago, even while sale dropped down to €12 billion ($16.8 billion), down from €12.7 billion ($17.8 billion) one year ago. Downloads at Nokia’s Ovi app store are now at one million per day.
After a bumper year for new entrants in the smartphone area like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG), Nokia is clawing back some market share in smartphones, with share up from 35 percent to 40 percent in that segment, the company is still looking for a product that can capture the public in the same way that Apple has with its iPhone.
“We are currently lagging with high-end midnshare products,” says Olli-Pekka Kallasvuo, the CEO of Nokia (NYSE: NOK). “We are definitely working on that product and will come out with that.” During the conference call he several times referred to having a “good” portfolio but needing a “great” portfolio.
But Nokia has cut R&D spend by €1.6 billion ($2.2 billion). How will that affect their ambitions to develop market-leading phones? “We are cutting out overall investment levels in R&D that we feel is adequate,” says Kallasvuo. “But high-end investment is happening as we speak. There is nothing new, no need to ramp up the investment.”
In all Nokia said it shipped 126.9 million devices, a 12 percent rise over the same quarter a year ago. Of that, 20.8 million were converged devices.
One million downloads per day on Ovi, but what about active users? There have been some questions about how Nokia counts Ovi users, using a very loose definition of “active”. Nokia says it is now “improving the KPIs” behind what it means to be “active but not that active.” He said that current figures that Nokia uses are good to use internally “drive change”. A preview of the kind of metrics they’ll be using in future: “When we launched the turn-by-turn navigation we have been able to follow that completely to see what users doing to a detail.”
Music to our ears? Comes With Music, Nokia’s music service, is now in 15 markets with 25 different operators but still faces some setbacks here. Most recently, Nokia released a new version of one of its music flagship devices, the X6 without the music service priced in.
Stable retail channel: Unlike Qualcomm (NSDQ: QCOM), which yesterday revised down its revenue forecasts, citing lower demand in its retail channel for feature phones using its technology, Nokia says that while it too had seen similar trends “that situation has now normalised.”
Nokia’s Navteq division reported revenues of €225 million ($315 milion). The company last week announced that it would be making mapping services free on its handsets.
What about tablets? Nokia says it is looking at this area more, “exploring as we speak.” Kallasvuo said that the Nokia booklet, which uses the Linux-based Maemo Windows 7 operating system, has had “tremendous” response. “The traction that we are getting gives us the understanding that we can deliver [different products] between the phone and the PC. You will see more in this space going forward.”