Nokia posts $1.36 billion third quarter loss

Nokia reported a $1.36 billion loss in the third quarter as it lowered the value of its wireless networks venture by $1.35 billion and global sales declined 20 percent.

Last year the company reported a profit of $1.63 billion and analysts are saying the company is being harmed by the slowing global economy, ferocious price competition and an unimpressive portfolio of smart phones. The New York Times reports Nokia’s leading share of the global cellphone market remained unchanged at 38 percent. Smartphones are the fastest growing segment of the market and the company saw their share drop to 35 percent, from 41 percent. Nokia has fallen behind Apple’s iPhone and RIM’s Blackberry. Jan Dworsky an analyst at Handelsbanken Capital Markets in Stockholm told the Times Nokia was being hurt by the “Apple and R.I.M. are really starting to eat into Nokia’s lead in smart phones.” “The big drop in Nokia’s operating profit margins, coupled with the significant loss in market share for smart phones, is what the market is really concerned about,” Dworsky said. The company’s sales have dropped to $14.5 billion in the third quarter, from $18.1 billion a year earlier. Sales fell casualty to declines of 25 percent to 31 percent in Latin America and North America, and the Asia-Pacific and Middle East-Africa regions. “It’s obviously tough times in the industry,” Chris Jones, an analyst at Canalys, a research business in Reading, England told the Times. “There is huge price competition in the mobile phone market, and Nokia is trailing its rivals, particularly Apple and R.I.M., in the race to make easy-to-use and fun smart phones.”