Nokia phone sales drop in Q1 as prices fall

Sales in Nokia Corp.'s core mobile phone business dropped in the first quarter as competition intensified in the global handset market, particularly from Asian vendors.

John Blau

Sales in Nokia Corp.'s core mobile phone business dropped in the first quarter as competition intensified in the global handset market, particularly from Asian vendors.

Phone sales dipped to €5.58 billion (US$ 7.44 billion as of March 31, the last day in the quarter being reported) from €5.87 billion in the same period a year earlier.

Overall net sales increased by 4 percent, however, to €9.86 billion, driven by demand for Nokia's multimedia devices, enterprise systems and networking equipment.

Net profit for the quarter declined 7 percent to €979 million, from €1.05 billion the year before, due largely to the drop in phone sales and restructuring charges of €69 million.

The Finnish manufacturer saw the average selling price for its mobile devices continue to fall, reaching €89 in the first quarter, compared to €103 in the same period a year earlier. Nokia attributed the price drop to a higher sales of less expensive entry-level devices in emerging markets, where the company has been gaining market share.

Mobile phone sales were down in all regions except for Asia-Pacific. Sales were down "significantly" in North America, Nokia said.

In its growth multimedia segment, Nokia shipped close to 8 million of its Nseries devices, including the new N95.

The company said it expects mobile device volumes to rise slightly in the second quarter.