Nokia Corp warned on Wednesday that its earnings this year would be hit by tough competition from rivals in the smartphone market.
The world’s largest mobile phone maker said competition “particularly at the high-end of the market” would force net sales in the current period to be “at the lower end of, or slightly below, its previously expected range of 6.7 billion euros to 7.2 billion euros [US$8.2 billion to US$8.8 billion].”
Nokia also said its operating margin in the period would be at the low end or below its previous prediction of 9 to 12 percent.
While the company is still a global leader in smartphones, it’s struggling to compete in the expensive segment with rivals such as iPhone-maker Apple Inc and Research in Motion Ltd, which makes BlackBerry handsets.
Last month, CEO Olli-Pekka Kallasvuo conceded that the Finland-based firm lacks a high-end smartphone, adding that it has “plenty of work to do” to keep up with the competition.
“The competition has steadily become tougher and the company has had to drop handset prices so that it can somehow stay in the competition for market share,” FIM Bank analyst Michael Schroeder said.
“Companies like Apple with its IPhone, and in the past few months devices have streamed into the market that use Google’s Android operating software,” Schroeder said.
“All of Nokia’s traditional competitors such as Samsung, LG, Motorola and Sony-Ericsson and so on — all except Nokia, really — have brought out such devices and they are eating away at Nokia’s share,” he said.
Nokia said that it had not changed its expectations of flat volume growth for the full year, while overall market growth was expected to be 10 percent over last year.
However, it added that now it expects the value of its own handset market share to be “slightly lower in 2010, compared to 2009,” when earlier it had predicted slight growth.
Nokia is scheduled to publish its second-quarter earnings report on July 22.
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