Nokia announces financial results

FINNISH PHONE FIRM Nokia has released its latest round of financial results.

Things are down, down, down and down across the board and year on year operating profit has fallen 41 per cent. Net sales have dropped seven per cent, and mobile phone net sales by around a third.

The company used to straddle the mobile phone market like a satisfied duck on top of a nest of eggs, but it has struggled in the past couple of years as it failed to make an impact in the smartphone market. Although it continues to perform well in the feature phone market, who wants a feature phone these days anyway?

A sudden alignment with Microsoft did little to quell doubts about Nokia's business model and redundancies among its workers could be said to have only increased those. In the light of all this no one was expecting strong results, and indeed the results are not strong.

"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011," said Stephen Elop, Nokia's CEO. Surprisingly though, he did have some good news.

"However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than-expected progress toward our strategic goals."

But how good is this good news? Well, it seems to be mixed. "During this time of transition, we expect competitive pressures to continue," added Elop, before admitting that early reactions from vendors about Nokia's arrangement with Microsoft have been "optimistic" at best.

Nokia was doing something very right just a few years ago, but now it is doing something very wrong, or rather, a lot of things not very well. Elop added that it is only through change that it will progress, but its changes so far have not been that exciting.

While it is making staff cuts, so is Nokia trying to make itself look better to those outside of its four walls. It recently kicked off an £80m rebranding effort and not very convincingly 'slipped up' by showing off a new handset called the Searay, supposedly by mistake. µ