Nok: Look Forward To March 2010 Quarterly Results
This post describes our model ofNokia’s (NYSE: NOK) Income Statement for the quarter that will end on 31 March 2010. GCFR estimates are derived from guidance provided by company management, when available, and the company’s historical financial results.
The intent of our look-ahead exercises is to produce a baseline for identifying surprises, positive or negative, in the reported data.
First, we present some background information about Nokia and the business environment in which it is currently operating.
Headquartered in Espoo, Finland, Nokia has been a leading global producer of mobile phones since 1998. The company also sells the network infrastructure that supports these phones. Nokia shipped 432 million mobile devices in 2009, down 8 percent from the year earlier. The company estimated its share of the mobile device market at 38 percent.
The market for mobile devices is highly competitive, and product development cycles are short. Nokia’s hand-held product line runs the gamut from modest entry-level devices to high-end smartphones. The latter, more profitable category includes Apple’s (NASDAQ: AAPL) iPhone, Research in Motion’s (NASDAQ: RIMM) Blackberry, Palm’s (NASDAQ: PALM) Pre, and Nokia’s N97. Samsung (SEO: 005930), Motorola (NYSE: MOT), LG Electronics (SEO: 066570) and Sony Ericsson are also potent competitors.
As phones morph into computers, software becomes increasingly important and a potential differentiator. For example, the popularity of the iPhone operating system has certainly benefited Apple. Nokia devices have long used the Symbian operating system, but the company also uses Maemo, a Linux derivative, in some newer products.
Other newer mobile operating systems include Android (used by Google in the Nexus One) and Windows Phone. Nokia is now working with Intel (NASDAQ: INTC) to