Get the latest news straight to your inbox.
Register for the Telecoms.com newsletter here.
We're well into the fourth quarter/full year 2007 reporting period now, seeing a mixture of highs and lows but no great surprises. Finnish vendor Nokia posted happy financial results for the fourth quarter and full year 2007 on Thursday, racking up a 67 per cent increase in profit for the year.
January 24, 2008
We’re well into the fourth quarter/full year 2007 reporting period now, seeing a mixture of highs and lows but no great surprises.
Finnish vendor Nokia posted happy financial results for the fourth quarter and full year 2007 on Thursday, racking up a 67 per cent increase in profit for the year.
Net income reached Eur7.2bn in 2007, compared to Eur4.3bn in 2006, while revenues for the year jumped 24 per cent to Eur51bn even as the company consolidated Nokia Siemens Networks into its results.
The various mobile device units shifted a record total 133.5 million units in the fourth quarter, up 20 per cent sequentially and 27 per cent year on year, with the high end N series of devices accounting for over 11 million shipments.
Nokia estimates its mobile handset market share for the fourth quarter was 40 per cent, compared with 39 per cent in the third quarter and 36 per cent a year ago. The company said it gained market share in every region except North America and Latin America, where market share declined.
On the networks side, fourth quarter net sales hit Eur4.6bn, up 25 per cent sequentially, with an operating balance of zero as the company absorbed restructuring costs related to the integration of Nokia Siemens Networks.
Fourth quarter net profit for the whole company climbed 44 per cent year on year to Eur1.83bn, with revenues increasing 34 per cent from Eur11.7bn a year ago to Eur15.7bn in 2007.
Nokia chief executive, Olli-Pekka Kallasvuo, said 2007, “was a year of important strategic initiatives by Nokia, with Nokia Siemens Networks starting operations, our internet services effort taking shape around Ovi, and the announcement of the pending acquisition of Navteq. Facing a market that remains intensely competitive, we are continuing to improve our leading device portfolio as well as execution at Nokia Siemens Networks. With this we believe Nokia is well positioned for growth in 2008.”
Meanwhile, on the other side of the pond, things were not looking so rosy for Motorola, which revealed that for the final quarter of 2007 profits fell from $623m a year ago to $100m, with net revenues falling from $11.8bn to $9.6bn in the same period.
Again, the Mobile Devices segment was the culprit behind the decline, with fourth quarter sales down 38 per cent to $4.8bn and operating loss dropping to $388m, compared with operating earnings of $341million in the year ago quarter. During the last three months of 2007, the company shipped 40.9 million handsets.
For the full year, Motorola recorded a net loss of $49m, compared to a profit of 3.6bn in 2006.
Second placed handset vendor Samsung, which began outpacing Motorola in 2007, shipped 46.3 million devices in the fourth quarter, a 41 per cent increase over the year, and 161 million handsets over 2007, marking a similar growth curve.
Sales for the telecoms department increased 6 per cent for the quarter to KRW5.37tn (Eur3.8bn) and 6 per cent for the year to KRW19.55tn, with handsets delivering KRW18.37tn.
“Having said that demand was strong, price competition was clearly tough in the quarter with revenue growth lagging shipments significantly,” said Ovum analyst, Martin Garner. Samsung’s average sale price fell from $151 in the third quarter to $148 in the fourth – a pain felt by all the handset vendors.
“In looking forward Samsung plans to strengthen its high-end devices with more touch screen, GPS, 5 megapixel camera and smartphone devices,” said Garner, but added that to grow its world market share significantly, Samsung needs to push into lower price tiers.
Fourth placed Sony Ericsson posted a strong set of results, shifting over 100 million units for the first time in 2007.
For the full year, net income climbed slightly from Eur997m to Eur1.1bn, with sales increasing from Eur11bn to Eur13bn.
Units shipped in the fourth quarter reached 30.8 million, an 18 per cent increase compared to the same period last year, offsetting concerns of a consumer slowdown in handset sales, although the average sales price dropped from Eur146 in the fourth quarter of 2006, to Eur123 in the same period 2007.
“Our target remains to become one of the top three players in the industry, and the momentum we established in 2006 and 2007 makes this a realistic and achievable ambition,” said Dick Komiyama, president of Sony Ericsson.
Ovum’s Garner, said that taken in isolation these are healthy results, however, he thinks the volumes are a bit disappointing. “Motorola handed its competitors a gift last year by losing more than 40 per cent of its world market share – a lot of market share changed hands during 2007 and Sony Ericsson has not cashed in on that as well as Nokia, Samsung and LG have.”
Meanwhile, relative newcomer to the handset market, Apple, racked up quarterly iPhone sales of 2.315 million, taking the total device shipments since the device launched in mid-2007 to over 4 million.
In his Macworld keynote in early January, Apple frontman, Steve Jobs’, revealed that the comapny is shifting 20,000 iPhones per day on average and in the US, Jobs reckons that the iPhone has got 19.5 per cent of the smartphone market, putting it in second place behind Research In Motion (RIM).
Read more about:Discussion
You May Also Like