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Nokia announce Q2 financial results: Sales up, profits down

Nokia have announced their financial results for Q2 2010 and again it’s mixed results for the number one mobile phone vendor. The Finnish outfit posted a rise in sales with €10.005 Billion net sales, 1% higher than the previous year and 5% higher than the previous quarter. The bad news comes in the shape of the net operating profit which has fallen to €660 Million; a 15% fall decline on the previous year and 20% quarter on quarter.

Whilst the increase in sales will provide some comfort, the sharp fall in profit will be worrying to say the least and will only further fuel the flames to those calling for current Nokia CEO Olli-Pekka Kallasvuo to step down. The unstable exchange rate and weakening of the Euro won’t have helped Nokia’s cause but it’s the drop in the average selling price of smartphones that will have had the most dramatic impact.

In Q2 of 2009, the average price of a smartphone was €181 but in Q2 2010 this has fallen by a whopping 21% to €143. Nokia has attributed this decline to “price pressure” in the high-end segment. This can probably be attributed in turn to the emergence of Android as a real force in both the high-end and low-end smartphone market. Speaking about the results, Kallasvuo conceded that Nokia had lost ground to competitors in the high-end smartphone space but looked ahead with optimism:

“In smartphones, we continue to renew our portfolio. We believe that the Nokia N8, the first of our Symbian^3 devices, will have a user experience superior to that of any smartphone Nokia has created. The Nokia N8 will be followed soon thereafter by further Symbian^3 smartphones that we are confident will give the platform broader appeal and reach, and kick-start Nokia’s fightback at the higher end of the market.”

The Nokia N8 is due to launch in October, click here for more details.

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