Nokia Oyj CEO Pekka Lundmark yesterday said that he would do “whatever it takes” to catch up with rival telecommunications equipment manufacturers in introducing 5G wireless technology.
Lundmark, who took the top job on Aug. 1, would abandon predecessor Rajeev Suri’s strategy, dubbed “end-to-end,” the Finnish company said in a statement yesterday.
End-to-end sought to provide customers with complete network systems, from physical equipment, such as antennas and optical cables, to software and other services.
Nokia is to adopt “a more focused approach,” the company said, as it looks to break down how it sells to clients and target higher-value sectors.
Nokia shares yesterday fell more than 15 percent in Helsinki trading, after the company reported sales that missed analyst estimates and lowered its outlook for the year.
“We have lost share at one large North American customer — see some margin pressure in that market — and believe we need to further increase R&D [research and development] investments to ensure leadership in 5G,” Lundmark said. “In fact, we have decided that we will invest whatever it takes to win in 5G.”
The Espoo, Finland-based company is seeking to catch up with rivals Ericsson AB and Huawei Technologies Co (華為) after early stumbles in the market for 5G and trouble integrating its giant Alcatel-Lucent purchase from 2016.
Nokia reported sales in the third quarter of 5.29 billion euros (US$6.21 billion), missing analyst estimates for 5.42 billion euros.
The company is well placed to take advantage of bans on some vendors, Lundmark told reporters by telephone.
A growing number of governments are placing restrictions or outright exclusions on equipment made by Huawei.
Nokia, which a year ago paused its dividend to funnel more cash to R&D, said that payouts are likely to resume once its net cash position improves to about 2 billion euros.
Nokia said that it ended the second quarter with a net cash balance of 1.9 billion euros.
“Our goal is to better align with the needs of our customers and through that, increase accountability, reduce complexity and improve cost-efficiency,” Lundmark said.
Nokia downgraded its prospects, saying that it expects to underperform in a declining market.
It had previously said that it expected a “flattish” market for this year.
Next year, it expects an adjusted operating margin in the range of 7 to 10 percent, missing the average analyst estimate of 10.6 percent.
For this year, it now sees adjusted earnings per share of 0.20 euros to 0.26 euros, compared with 0.20 euros to 0.30 euros previously, and an adjusted operating margin of 8 to 10 percent, compared with an earlier 8 to 11 percent.
Mercuries Life Insurance Co (三商美邦人壽) shares surged to a seven-month high this week after local media reported that E.Sun Financial Holding Co (玉山金控) had outbid CTBC Financial Holding Co (中信金控) in the financially strained insurer’s ongoing sale process. Shares of the mid-sized life insurer climbed 5.8 percent this week to NT$6.72, extending a nearly 18 percent rally over the past month, as investors bet on the likelihood of an impending takeover. The final round of bidding closed on Thursday, marking a critical step in the 32-year-old insurer’s search for a buyer after years of struggling to meet capital adequacy requirements. Local media reports
US sports leagues rushed to get in on the multi-billion US dollar bonanza of legalized betting, but the arrest of an National Basketball Association (NBA) coach and player in two sprawling US federal investigations show the potential cost of partnering with the gambling industry. Portland Trail Blazers coach Chauncey Billups, a former Detroit Pistons star and an NBA Hall of Famer, was arrested for his alleged role in rigged illegal poker games that prosecutors say were tied to Mafia crime families. Miami Heat guard Terry Rozier was charged with manipulating his play for the benefit of bettors and former NBA player and
The DBS Foundation yesterday announced the launch of two flagship programs, “Silver Motion” and “Happier Caregiver, Healthier Seniors,” in partnership with CCILU Ltd, Hondao Senior Citizens’ Welfare Foundation and the Garden of Hope Foundation to help Taiwan face the challenges of a rapidly aging population. The foundation said it would invest S$4.91 million (US$3.8 million) over three years to foster inclusion and resilience in an aging society. “Aging may bring challenges, but it also brings opportunities. With many Asian markets rapidly becoming super-aged, the DBS Foundation is working with a regional ecosystem of like-minded partners across the private, public and people sectors
BREAKTHROUGH TECH: Powertech expects its fan-out PLP system to become mainstream, saying it can offer three-times greater production throughput Chip packaging service provider Powertech Technology Inc (力成科技) plans to more than double its capital expenditures next year to more than NT$40 billion (US$1.31 billion) as demand for its new panel-level packaging (PLP) technology, primarily used in chips for artificial intelligence (AI) applications, has greatly exceeded what it can supply. A significant portion of the budget, about US$1 billion, would be earmarked for fan-out PLP technology, Powertech told investors yesterday. Its heavy investment in fan-out PLP technology over the past 10 years is expected to bear fruit in 2027 after the technology enters volume production, it said, adding that the tech would
RSS