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Jan. 29, 2010

Late yesterday, after the markets closed, Nokia announced better than expected earnings for its fourth quarter.

Nokia delivered a 65 increase in net profit for the fourth quarter of 2009. The mobile handset maker reported a net profit of $1.3 billion, up from $806 million a year ago. That's an increase of more than 61 percent.

The company's converged mobile devices, comprising smartphones and mobile computers, hit 20.8 million units in the fourth quarter, compared with 15.1 million units in the fourth quarter 2008 and 16.4 million units in the third quarter of 2009.

The company says its share of the converged mobile device market was an estimated forty percent in the fourth quarter 2009, up from an estimated 35 percent in the third quarter of last year.

The company's networking division, which operates under Nokia Siemens Networks, saw a decline of 16 percent to $5 billion, compared with $6 billion in the fourth quarter of 2008. Nokia said the drop was due to challenging competitive factors and tougher market conditions.

Ovi Store, Nokia's mobile content outlet, also delivered good numbers. Ovi is now attracting more than 1 million downloads a day, according to the company.

Nokia shipped about 4.6 million N Series handsets and about 6.1 million E Series devices during the fourth quarter of last year. Those numbers are up from the combined 8.9 million N Series and E Series devices shipped in the third quarter of last year.

Julien Blin, founder of JB Research, said in a research note that the company's sales numbers for the quarter are not only surprising but they also look promising for an OEM that's up against some very tough competition.

Blin said "the fact that Nokia's market share in the smartphone market grew to forty percent from 35 percent is quite impressive and highly unexpected, especially given the increased level of competition from companies like LG, Samsung, Apple, Palm, RIM, and HTC."

Blin also thinks Ovi's new free navigation service will be a strong point when combined with increased participation in North American markets.

Blin added "the fact that Nokia is now offering its mapping service for free could help the handset vendor drive the popularity of its smartphones, especially in the U.S."

Nokia owns navigation provider Navteq and uses its software to power turn-by-turn navigation for its smartphones for both vehicles as well as pedestrians.

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Source: Nokia.