Nokia is leading the way in the mobile phone industry with innovation and massive profitability and its paying off huge for their stock holders. Lets break the recently announced numbers down and yes there is math involved so get out that number 2 pencil folks…just kidding.
Net Sales of 12.6 Billion (That’s Billion with a B people) which is an increase of 2.7 Billion over Q2 ‘o6 earnings. A Gross profit of 3.9 Billion (Thats nearly 4 Billion in 3 months) which amounts to an increase of 700 million over Q2 ’06 earnings. Nokia now has an estimated 38% market share which dominates the mobile industry.
This news caused Motorola to fall to its knees and start weeping uncontrollably like the dude that Jessica Alba just kicked to the curb. They pondered aloud that they have really really thin phones and that it is all customers want so what was the problem? I sent them a text message advising that direct sales and unlocked mobile phones are really what people want but they didn’t respond, which is really bad texting etiquette. Perhaps they were just really engrossed in TRL due to all of its cutting edge interviewing and just forgot to respond or maybe they were just using the T-Mobile network and it was one of the 25% of the messages that never reach their intended destination.
Whatever the reasons lets hope that not only they but the rest of the mobile phone manufacturers start to adopt the ways of Nokia. However with Apple and AT&T taking such steps to make sure that no one can unlock the iPhone its doubtful that a change in the industry will be coming anytime soon. One can understand the reason why AT&T would take the steps it did to ensure only its network would work with the Jesus Phone but Apple really shouldn’t care as sales is what they want and need. One can imagine what kind of sales that T-Mobile and every other GSM provider in the world rack up if they were able to sell the iPhone.
Why Sony Ericsson, HTC, Motorola, Palm, Samsung or even Research in Motion would allow other companies to unlock their products and sell them at a markup is beyond me. Nokia has proven the market exists for direct sales and as proof they shipped 9 million Nokia N-Series Phones and almost 2 million Nokia E-Series devices during the second quarter of 2007 alone. The focus on high end devices, like the Nokia N-95, allowed the company to gain an additional 4% of the handset market share. This has completely caught analysts off guard and they continue to be amazed at Nokia’s huge profits and sales.
This all points to the fact that Nokia’s dominance will continue as they take the chances that keep them ahead of the curve, CTO Tero Ojanper predicts when the features of the N95 are common place around the world in 2-3 years the mobile entertainment business will explode and Nokia will be there ahead of the pack once again. Few could argue with this assessment as focusing on the European and Asian markets have helped them stay on the cutting edge and that is exactly where the competition wishes they were.