Has the Cell Phone Market Hit Bottom Yet? Nokia and Sony Ericsson See Staggering Sales Drops

Nokia reported staggering losses in sales and profits for Q1 this week, including a 90% drop in net profit. The news came alongside similarly dim reports from Sony Ericsson, which reported that it lost nearly half its sales in the last three months

Some analysts were contending that worldwide demand for mobile phones would be resilient, despite belt-tightening worldwide–but if that’s the case, Nokia isn’t seeing any evidence of it. The company’s sales plunged 27%, or about $4 billion, since this time last year.


Nokia’s troubles aren’t entirely the fault of its products. The company’s touchscreen 5800 XpressMusic is selling well, with 2.6 million of the phones delivered in the first quarter. Still, the Swedish phone-maker saw its market share decline from 39% to 37% in just a year.

The solution may be diversification. Nokia is pushing developers hard to streamline its smartphone application store and improve its “Comes With Music” MP3 service, hoping to squeeze more functionality (and money) out of each of the 90-plus million handsets they sell each quarter. With Apple planning a new iPhone for this summer, while RIM and Palm begin populating their own application stores, the Finns will have plenty of work to do.CD