Nokia loses its grip on mobile dominance

Profit margins at Nokia are expected to come under increasing pressure this year as the Finnish mobile phone maker battles to stop the rot in its crucial market share figures.

Profit margins at Nokia are expected to come under increasing pressure this year as the Finnish mobile phone maker battles to stop the rot in its crucial market share figures.

New research from Gartner, the firm of technology analysts, confirmed a worrying decline in Nokia's global market share yesterday. The company is being outstripped by more nimble competitors such as Motorola and Samsung who have also benefited by being more willing to bend to the wishes of network operators, such as Vodafone, when designing handsets.

Nokia saw its global market share tumble from 34.6 per cent to 28.9 per cent between the first three months of last year and the first quarter of 2004. Motorola rose from 14.7 per cent to 16.4 per cent, while Samsung jumped from 10.8 per cent to 12.5 per cent.

Gartner's latest Nokia market share figures compare with its best figures for the mobile phone maker of 36.9 per cent, recorded in the final quarter of 2001. Nokia's own estimate of its best market share figure is 38.9 per cent, which means its decline could be equal to as much as a quarter of its peak market share.

Total global mobile phone sales in the first quarter were 153 million with Gartner increasing its full-year estimate to 600 million from 580 million.

Ben Wood, an analyst at Gartner, said there was evidence that Nokia had taken action since the start of the year to bolster its position, but this involved cutting prices which would squeeze profits.

"I think we have to be a bit careful. I am definitely not writing them off," he said. "They have taken some pretty rapid action implementing price cuts in the second quarter. We are seeing them stabilising their market share position and may even catch up. The trade-off, obviously, from a financial perspective is that they have had to cut margins to do that, which is unlikely to be popular."

Mr Wood added: "Nokia's dramatic drop in market share resulted from a weak product portfolio and the decision by operators in Western Europe to source more phones from Nokia's competitors."

Gartner measures sales volumes in the mobile phone market but financial analysts have already started slashing their forecasts for Nokia. Goldman Sachs and Morgan Stanley recently cut their estimates for the company, issuing highly bearish assessments of the company's outlook. Even in emerging markets, where Nokia has seen its traditional dominance maintained thanks to demand for cheap, entry-level handsets, there is evidence it may be struggling.

Morgan Stanley told clients four weeks ago that a market research contact in Russia had suggested Nokia had dropped from No 1 to No 3 there, although Nokia disputes this.

However what Nokia is not denying is that globally its market share has taken a battering. A spokeswoman said: "We have taken action to improve our market share."

Many analysts believe its problems are deep-seated. "It is really in the mature markets, such as Western Europe and the US, where Nokia has missed the mid-tier market with the likes of the clam-shell products," Mr Wood said.

Nokia's traditional "candy bar" design of phone has looked increasingly out of date compared with flip-top models.

Start your day with The Independent, sign up for daily news emails
Voices
Lucerne’s Hotel Château Gütsch, one of the lots in our Homeless Veterans appeal charity auction
charity appeal
Arts and Entertainment
Tony Hughes (James Nesbitt) after his son Olly disappeared on a family holiday in France
tv
News
people

Jo from Northern Ireland was less than impressed by Russell Brand's attempt to stage a publicity stunt

Sport
Scunthorpe goalkeeper Sam Slocombe (left) is congratulated by winning penalty taker Miguel Llera (right)
football
PROMOTED VIDEO
Arts and Entertainment
The Apprentice candidates Roisin Hogan, Solomon Akhtar, Mark Wright, Bianca Miller, Daniel Lassman
tvReview: But which contestants got the boot?
Life and Style
A woman walks by a pandal art installation entitled 'Mars Mission' with the figure of an astronaut during the Durga Puja festival in Calcutta, India
techHow we’ll investigate the existence of, and maybe move in with, our alien neighbours
Arts and Entertainment
Jim Carrey and Jeff Daniels ride again in Dumb and Dumber To
filmReview: Dumb And Dumber To was a really stupid idea
Arts and Entertainment
Sir Ian McKellen tempts the Cookie Monster
tvSir Ian McKellen joins the Cookie Monster for a lesson on temptation
News
i100
Travel
Tourists bask in the sun beneath the skyscrapers of Dubai
travelBritish embassy uses social media campaign to issue travel advice for festive holiday-makers in UAE
News
ebooksNow available in paperback
Arts and Entertainment
Jennifer Saunders stars as Miss Windsor, Dennis's hysterical French teacher
filmJennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress
Life and Style
tech
Sport
Nabil Bentaleb (centre) celebrates putting Tottenham ahead
footballTottenham 4 Newcastle 0: Spurs fans dreaming of Wembley final after dominant win
Voices
Jimmy Mubenga died after being restrained on an aircraft by G4S escorts
voicesJonathan Cox: Tragedy of Jimmy Mubenga highlights lack of dignity shown to migrants
Life and Style
Sebastian Siemiatkowski is the 33-year-old co-founder and CEO of Klarna, which provides a simple way for people to buy things online
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Java Developer - Hertfordshire - £47,000 + bonus + benefits

£40000 - £470000 per annum + bonus: Ashdown Group: Java Developer / J2EE Devel...

Ashdown Group: Direct Marketing Manager - B2C, Financial Services - Slough

£45000 - £55000 per annum + Benefits: Ashdown Group: An exciting opportunity h...

Carlton Senior Appointments: Sr Wealth Manager - San Francisco - Inv AdvisoryFirm

$125 - $175 per annum: Carlton Senior Appointments: Senior Wealth Manager – In...

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Day In a Page

Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas
La Famille Bélier is being touted as this year's Amelie - so why are many in the deaf community outraged by it?

Deaf community outraged by La Famille Bélier

The new film tells the story of a deaf-mute farming family and is being touted as this year's Amelie
10 best high-end laptops

10 best high-end laptops

From lightweight and zippy devices to gaming beasts, we test the latest in top-spec portable computers
Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

Michael Carberry: ‘After such a tough time, I’m not sure I will stay in the game’

The batsman has grown disillusioned after England’s Ashes debacle and allegations linking him to the Pietersen affair
Susie Wolff: A driving force in battle for equality behind the wheel

Susie Wolff: A driving force in battle for equality behind the wheel

The Williams driver has had plenty of doubters, but hopes she will be judged by her ability in the cockpit
Adam Gemili interview: 'No abs Adam' plans to muscle in on Usain Bolt's turf

'No abs Adam' plans to muscle in on Usain Bolt's turf

After a year touched by tragedy, Adam Gemili wants to become the sixth Briton to run a sub-10sec 100m
Calls for a military mental health 'quality mark'

Homeless Veterans campaign

Expert calls for military mental health 'quality mark'
Racton Man: Analysis shows famous skeleton was a 6ft Bronze Age superman

Meet Racton Man

Analysis shows famous skeleton was a 6ft Bronze Age superman
Garden Bridge: St Paul’s adds to £175m project’s troubled waters

Garden Bridge

St Paul’s adds to £175m project’s troubled waters
Stuff your own Christmas mouse ornament: An evening class in taxidermy with a festive feel

Stuff your own Christmas mouse ornament

An evening class in taxidermy with a festive feel
Joint Enterprise: The legal doctrine which critics say has caused hundreds of miscarriages of justice

Joint Enterprise

The legal doctrine which critics say has caused hundreds of miscarriages of justice
Freud and Eros: Love, Lust and Longing at the Freud Museum: Objects of Desire

Freud and Eros

Love, Lust and Longing at the Freud Museum