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Nokia market share to take a hit
The mobile handset market is going from bad to worse as Nokia, the world's largest maker of cell phones, said Friday that it's lowering its third-quarter market share outlook due to the weakening global economy.
The Finnish company has dominated the mobile handset market over the past few years. Last quarter, it reported it had grabbed 40 percent of the entire worldwide market. At the time, executives were confident that the company would maintain this level. But now, as the worldwide economy worsens, executives say they expect Nokia's market share to slip slightly in the third quarter. That said, the company still expects to increase its market share for the year.
Executives blame the shift in expectations on a weakening global economy and a reluctance to engage in a price war with certain competitors. Even though the company expects to increase device sales volume by 10 percent or more this year, Nokia executives say that consumer confidence has been shaken and prices are falling. The company didn't specifically point fingers at which competitor had cut prices.
Nokia has several new handsets in the pipeline to be launched during the quarter, but sales of some of its midrange products have been slower than expected, the company said. Again, the company hasn't specified which handsets have not been selling as well.
Nokia isn't the only handset maker to feel the pinch of a slowdown. Samsung Electronics said during its second-quarter earnings call that it also sees the weakening economy affecting its sales in the second half of the year.
The second quarter was already slow in the U.S. market where sales were down 13 percent, according to the NPD Group. Nokia has relatively little market share in the U.S., but slowing sales in other developed regions such as Europe, Japan, and Asia will have a great impact on the company. Still, Nokia sees developing markets as its source of growth in the near future.
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.
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Clearly if a slowing world economy was the real reason for falling sales from these long established manufacturers then Apple would be affected too. So why the stark contrast? Is it that Apple did the revolutionary thing of making a phone that people want to use instead of a phone that simply crams large numbers of features into the smallest space possible whether they work well or not as other company's have been doing until now?
As someone with a new iPhone I must say that even though the iPhone has less features than the Sony Ericsson it replaced, I actually use more features on the iPhone because the features it has work well unlike the Sony Ericsson. The iPhone is the first phone I have had that is fun to use and everyone I know who has one loves it.
Perhaps Nokia and others should look to the quality of the phone experience they provide before they start blaming everyone else for their misfortunes.