Nokia Corp. (NYSE ADR: NOK) shares were hammered today (Wednesday) after the company announced its continued smartphone market struggles would weigh on profits in 2012.
Nokia, the world's largest maker of cellphones by volume, warned that mobile phone sales will be weaker than forecast in the first quarter due to strong competition in fast-growing markets. After previously thinking it would break even, Nokia now predicts a 3% loss.
The word of warning highlights the steep challenges the Finnish cellphone maker faces in attempts to bolster its smartphone lineup. Cellphone devices and services account for up to 60% of Nokia's sales.
The latest lowered profit forecast is the second in less than a year, and the note of caution sent shares of Nokia plummeting to a 15-year low. Nokia last warned of falling profits in May 2011 due to its weak and diminishing presence in the ever-growing, highly contested smartphone market.
Now the company needs to figure out how to compete with the raging popularity of Apple Inc.'s (NASDAQ: AAPL) iPhone, while fending off competition among lower-end smartphone models running Google Inc.'s (NASDAQ: GOOG) Android operating system.
Click here to continue reading...
Microsoft-Nokia Deal Doesn't Guarantee a Spike in Smartphone Market Share
While two major research firms predict that the February deal struck between Microsoft Corporation (Nasdaq: MSFT) and Nokia Corporation (NYSE ADR: NOK) will result in a huge jump in smartphone market share for Windows Phone, such gains won't come easily - if at all.
The two companies announced on Feb. 11 that they would jointly enter the mobile smartphone market - in what some might call a "shotgun marriage" - with Nokia making the hardware and Microsoft proving the operating system (OS).
Each company has lost significant market share over the past few years, starting with the debut of Apple Inc.'s (Nasdaq: AAPL) iPhone in 2007. When Google Inc.'s (Nasdaq: GOOG) Android landed the next year, its meteoric rise created a crisis for both Nokia's Symbian and Microsoft's Windows Mobile operating systems.