Nokia reports 96% drop in profits

Nokia has reported a 96% drop in profits as it suffers from falling sales of high-end phones as subscribers opt for Apple iPhones.



The handset giant said first-quarter profits were down to €55m (£40m) from €1.5bn (£1.09m) in the same period in 2008, while overall revenues fell by 27% to €9.3bn (£6.78bn).

The company also said it shipped 93.2m phones in the first three months of the year.

The flagship Nokia 5800 XpressMusic touchscreen phone, dubbed ‘the poor man’s iPhone’ by analysts, has reached sales of 3m since its launch in November.

No figures were made available about the success of its unlimited music service Comes With Music, which was launched with a huge marketing budget.

Nokia said lower-than-expected sales of its high-end Nseries phones contributed to its global market share falling to 37%, compared to 39% in the same quarter last year.

Last month Apple revealed its iPhone had sold 17m units since it was launched in June 2007.

Olli Pekka Kallasvuo, CEO of Nokia, said he remained confident about the second quarter because many suppliers were running low on phones and needed to restock.

“The inventory already in the sales channels decreased substantially during Q1 due to extensive destocking by operators and distributors. This adversely impacted our sales volumes in the quarter,” he said. “However, it has also resulted in demand becoming more predictable as we enter the second quarter.”