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Fri, Jul 03, 2009 - 11:14 PM EDT  —  AAPL: 140.02 (-2.81, -1.97%)  |  NASDAQ: 1796.52 (-49.20, -2.67%)

Nokia shares slammed in wake of miss; Nokia CEO calls Apple iPhone ‘niche product’
Thursday, April 17, 2008 - 09:55 AM EDT

"Shares of Nokia Corp. fell as much as 10% Thursday after the world's largest maker of mobile phones reported a smaller-than-expected 25% increase in first-quarter profit and forecast the mobile-phone market to shrink in euro terms this year," Aude Lagorce reports for Dow Jones.

"Nokia's net profit in the three months ended March 31 improved to 1.22 billion euros, or 0.32 euro a share, from 979 million euros, or 0.25 euro a share, earned in the year-ago first quarter. The profit missed consensus forecasts calling for earnings of 1.38 billion euros, according to a survey of 29 analysts conducted by FactSet," Lagorce reports.

"Excluding one-time costs for pensions and the closure of a plant, the latest quarter's earnings came in at 0.38 euro a share. Sales rose 28% to 12.7 billion euros, in line with expectations," Lagorce reports. "Nokia's shares were last down 10% in early afternoon trading in Helsinki."

"Analysts at Citigroup recently expressed concern about a lack of major products in the second quarter. The company has said it won't launch a touch-screen riposte to Apple Inc. and its high-end iPhone until the second half of the year, and it's yet to give a firm date," Lagorce reports. "Nokia Chief Executive Olli-Pekka Kallasvuo on Thursday brushed off suggestions that Nokia needs to do more to fight back the foray of iPhone onto its home turf, calling it a 'niche product.'"

Full article here.

MacDailyNews Take: Kallasvuo is either incapable of applying the lessons of iPod to iPhone and understanding what's coming his way or, much more likely, he understands perfectly and, since he has no answer, is saying just what many now-defunct (if they aren't making iPod accessories) MP3-makers said a few years ago. How many "niche" products have $100 million venture capital funds ready and waiting, exactly? Candybars and way-too-late, fake 1st generation iPhones with craptastic UI's aren't going to cut it from here on out, Nokia boy. This June, the bloodbath really begins, and Kallasvuo sounds like he knows it.

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Apr 17, 08 - 09:59 am Comment from: NCMacMan

Wow. Someone's bitter. . .

Apr 17, 08 - 10:00 am Comment from: MikeH

Sales rose 28% and the stock dove. Ya gotta love Wall St.

Apr 17, 08 - 10:04 am Comment from: peragrin

I am glad I don't live in De-nile. that place must be awfully crowded.

Apr 17, 08 - 10:11 am Comment from: Think

@ MikeH

Yep, glad to see some one else take a beating.

Apr 17, 08 - 10:16 am Comment from: Mac+

Nokia CEO is damned right... as long as iPhone is not sold cheaper and in more than 75 countries of the world, including China and India.

Locking iPhone is the surest way for Apple to miss the boat with this revolutionary product, repeating the mistake they've done with the Mac.

Apr 17, 08 - 10:20 am Comment from: kenh

I have a Nokia 6255, ok, it's not a smartphone, but it has tons of "features" almost none of which are actually useable.

But have to stay with it since I don't have AT&T;where I live.

Also have a company supplied Motorola basic cell. Has great looking keys that appear to be easy to use. Yeah, right! Far easier to type accurately on an iPod Touch.

Apr 17, 08 - 10:21 am Comment from: kenh

One more thing;

The world is made up up niches. The question is which ones do you fill.

Nokia, not too many!

Apr 17, 08 - 10:24 am Comment from: viktor

@+Mac
I agree.....

Apr 17, 08 - 10:24 am Comment from: Harry

The iPhone becomes to much of a hype if not soon general worldwide avaiable, with own choice provider. Apple makes the same mistake as Micro$oft did.

Apr 17, 08 - 10:25 am Comment from: Crazylegs

to them, iPhone is a niche. remember they sell over 100 million phones a quarter. they are getting a lot of growth in the low end cheap ass phones with tiny margins. not where i want to be in the market, but someone has to serve the low end. and what is funny is the continued belief that june is some seminal moment and the bloodbath will start. you're delusional MDN. the new iPhone will sell really well and continue to be extremely successful, but we don't need a bloodbath to have success. and as good as YOU think the iPhone is, there are many folks who, for whatever reason, don't like it and never will. that's just called consumer choice, which is a very good thing. i guess all these years of having a superior computer platform but garnishing such low mkt share has made MDN bitter. hopefully as the mkt share for the mac finally explodes, the bitterness will recede...

Apr 17, 08 - 10:25 am Comment from: rahrens

"... repeating the mistake they've done with the Mac."

What mistake? Apple has over 20% of the consumer PC market in the US, and almost 7% of the overall market, and their YOY sales Q1 08 were up ten times greater than the increase for the entire PC market in the US!

Doesn't sound like a mistake to me!

Apr 17, 08 - 10:27 am Comment from: His Shadow

I have no love for Nokia, but what kind of system have we set up in this greed driven society where a successful company that records a healthy profit increase gets punished? Just how much money is enough for investors?

Apr 17, 08 - 10:31 am Comment from: MikeH

We'll see what Wall St. does to Apple on 23 April. When is someone going to go after Wall St.?

Apr 17, 08 - 10:36 am Comment from: MobiWan

Guys, I'm not defending the anti-logic that is Wall Street, but the issue here I think is that regardless of the fact that their sales were up 28% for the quarter that just passed, the issue likely is the feeling that Nokia has nothing new up their sleeve and 'other' vendors (one in particular) do.

Belittling the iPhone and its impact doesn't help that impression either. Palm made similarly veined statements and look where they are (or aren't) now.

Apr 17, 08 - 10:37 am Comment from: kenh

RE: "Just how much money is enough for investors?"

Well, enough to provide food, clothing, shelter for my family, and to pay those who work for me, and for them to use their pay to buy food, clothing, shelter etc, and for those from whom my employees buy their food, clothing, shelter from to do the same.

Get the point? I hope so, most don't since we don't teach economics any. That system works better than "managed economy" systems.

Are there abuses? Yes, but far less than the former Soviet Union, China, etc.

Let the flames begin.

Apr 17, 08 - 10:43 am Comment from: wow

This is the first set of posts on MDN that have finally dared to question the MDN take, amen!

also i notice on this site a lot of US market this and US market that with regard to computer market share and growth, whilst its nice having market share in the US, the growth markets are China and India where they have 2 billion population total to the US 260 million.

How are apple doing there? whats the growth like?

and also if the growth in China and India is largely restricted to lower cost units than the Mac then Apple are actually positioned quite poorly dont you think with a softening US market and a rampant asian one?

Apr 17, 08 - 10:43 am Comment from: sapiens

I have to agree with Mac+
:( :( :(

Apr 17, 08 - 10:47 am Comment from: critic

@mac+ (and Nokia)

It is all nice and well to dismiss the iPhone by using "niche product" as a pejorative adjective, but going for the mass market may sell lots of units yet not making any PROFIT, which should be the goal of any business. Look at how well Motorola did by focusing on phones cheap enough that carriers would give them away.

Also take into account brand positioning and brand psychology. Apple is a premium product commanding premium pricing. The brand (and the company and stock, by extension) would be devalued if Apple products were giveaways for the phone companies.

If your product costs $0, then the eventual perceived value of your products by customers is $0.

I think SJ is taking the right path here by trying to change the market dynamics in the cell industry. The value of Apple's unique hardware should be what drives people to spend money on the iPhone. It is not a commodity.

The phone service is what consumers should consider interchangeable and a commodity.

Apr 17, 08 - 10:49 am Comment from: Beryllium

@His Shadow
"Just how much money is enough for investors?"

Is there any limit to greed?

Apr 17, 08 - 10:49 am Comment from: Follower

@wow: "This is the first set of posts on MDN that have finally dared to question the MDN take, amen!"

As they say on Slashdot, you must be new here.

Apr 17, 08 - 10:51 am Comment from: HRH Queen of the South

Communism mentioned AGAIN. It can only mean that people are tiring of the abuses of Capitalism.

Well hard luck, slaves, you are f**ked by any system, Cap. or Comm. where you think one vote every four years is somehow 'democratic'.
'But they hate our freedom' LOL! Yeah right, freedom to be abused by the Boss. Read Animal Farm, idiots.

As for the iPhone, it is easily the best product of its type out there.
All consumers love it, but not all can afford it or want to change carriers.
There are no 'comparable' products, and there wont be.
There are phones, and there is iPhone.

if you dont like what Apple is doing with it, buy a huge block of Apple shares and vote Steve Jobs off the board.

Good luck.

Apr 17, 08 - 10:51 am Comment from: DLMeyer

He's right ... the iPhone is a niche product - for people willing to spend hundreds for a phone, for people willing to either live with AT&T or deal with a liberated phone, for people who need (or WANT) the extra features. As kenh said, the world is made up of niches. Apple has clearly defined the niches it wants to operate in - even if the market (we the consumers as well as many analysts) don't understand this. Nokia wants to ship many versions aimed at many niches, and it wants to then snipe at Apple's single product for being aimed at a single niche? Apple isn't going after "the cell phone market", just the top end of it. And it seems to be doing it quite nicely, thank you. Will June bring "a bloodbath"? Not hardly likely. Apple will just be widening the niche a tad and making it easier to decide on their product, rather than staying with what you have.

Apr 17, 08 - 10:51 am Comment from: Mac+

@ Rahrens

What mistakes??? Look man this is obvious, they've completely missed the opportunity to become a major player in the PC world. They left it to Bill Gates, Dell, etc... and I'm not asking about Apple to all of a sudden ship cheap products!!! I'm just asking them to be a little bit more affordable and a little bit more open!!! This doesn't mean becoming the McDonald of the computing world. iPhone could be sold tomorrow morning unlocked worldwide for about $50 to $100 less!!!

Apple is definitely missing the boat here. Viktor is right, and Crazylegs too... This Businees Week article will convince you all: http://www.businessweek.com/magazine/content/08_17/b4081000500950.htm

Apr 17, 08 - 10:54 am Comment from: Mac+

@critic,

Again, being more open and more affordable doesn't mean becoming Michael Dell!!!!!!!!! It's not all black or white!!!!!!!!! Apple could really do a better job worldwide in general...

Apr 17, 08 - 10:55 am Comment from: Jim

@His Shadow
"Just how much money is enough for investors?"

I agree 100%. It's absurd when the news reports that 'Company A' has "only" made a profit of £200m and therefore will be laying people off in an effort to boost earnings.

This capitalist system is being milked for all it's worth by the bastard fat cats who sit at the top of these companies.

Apr 17, 08 - 10:56 am Comment from: LinuxGuyAndMacProdigalSon

I simply have to laugh at the posters who whine about Apple's "failure" to make the iPhone readily available globally. What are you smoking! The reason that Apple's model works so well is that it does not make rushed stupid deals that are sure to destroy its business model down the road.

Apr 17, 08 - 10:59 am Comment from: @ Mac+

Missed the opportunity to be a major player in the PC world?

WTF!? They ARE a major player in the PC world!

You mean they arent Dell? Correct, but then Dell will be gone in 5 years, and is worth 1/3 of Apple.

You mean they arent Micro$hit? No they dont make a CRAP OS.

You want Apple to sell a cheap 'headless' Mac, and still make money. Impossible.
You want them to license their OS so it runs on garbage PC's? Forget it.

THERE IS NOTHING WRONG WITH APPLE. OK?

Go buy a Windows machine and be happy.

Apr 17, 08 - 11:01 am Comment from: Cap

If Apple was run by these people that post on internet forums, they would have been put out of business a long time ago. Luckily, Steve Jobs knows what he's doing and he doesn't follow the advise of these amateur armchair quarterbacks.

Apr 17, 08 - 11:01 am Comment from: Mac+

@ LinuxGuyAndMacProdigalSon

Apple business model sucks!!!!!!! The only reason Mac are selling more is because Windows is running on them. Apple should learn is lesson and stop trying to close down and control the all world. iPhone could sell like hot cakes tomorrow morning and not for a lot a $$$ less...

Apr 17, 08 - 11:05 am Comment from: Mac+

"They ARE a major player in the PC world!"

NOPS!!!!!!!!!!! They INN-O-VA-TE and that's it. In three years, Microsoft will be taking advantage of multi-touch technology and sell a lot more than Apple. History will repeat itself as long as Mr Jobs doesn' embrace the open mentality of the world we're living in.

Apr 17, 08 - 11:06 am Comment from: Billy the Fish

'Its not black or white'

Yes, it is. The compromise, lets all be happy with grey, makes me puke.

Stand up man! Be a mensch! Some things are plain wrong, and the cheap crappy PC's with Windows are just that.

White is good, black is bad. There is no compromise with the world of cheap crap, or with Bad anything.

Apple is the good guy, as far as it goes. Good aint cheap, and its obviously not for the masses either.

The unexamined life is not worth living.

Apr 17, 08 - 11:08 am Comment from: Demon

Nokia Shares Fell because their phones with the "Comes with Music" (CWM) service is killing all of the profits from the phones. UMG, the only label signed up currently, got $33.50 per handset (average gross income to Nokia for each of the CWM phones is $100.00). If Nokia signs other labels to the CWM Service it is estimated that Nokia will be paying the Music Label between $120.00 to $160.00 or more per phone. Then with the costs like R&D;, Management, Basic Overhead, Customer Support, and the manufacturing costs. Nokia stands to loose about $125.00 for each of the CWM phones.

If you were an Investor in Nokia and the company is make choices that could in the end cost it $125.00 per phones. How long would you bank on the company saying in a top position in their industry? As iPhone eats away at Nokia's market share their getting desperate to stop the bleeding. The "Comes with Music" was a bad deal for Nokia, and their customers, great deal for UMG.

Apr 17, 08 - 11:08 am Comment from: DLMeyer

wow, I often disagree with the MDN take - if only for its frequently less-than-mature choice of words and/or attitude. As for this site's focus on the US market ... that's where most Mac owners are. While there is a much larger market out there - China and India each have more citizens but fewer of them have computers and less of the market is given over to the profitable top end 'niche' - Apple is one of the Big Boys despite it's narrowed focus. Its Market Cap is close to the total of HP, Dell and Sun.
Mac+, Note the above. HP and Dell both sell more computers both in the US and in the world, yet their combined worth is less than Apple's. Yes ... Apple could (should?) make greater efforts in other parts of the world. But they can continue to be a major player without doing so.

Apr 17, 08 - 11:08 am Comment from: HD Boy

Apple isn't missing the boat -- it is building an entirely new (and better) boat using radical new designs. As with the iPod, it will take time to fully ramp up this business model -- two-to-three-years, I suspect. Over time, we will see a range of iPhone models at various price points.

This takes time because Apple also has to build a new infrastructure for their phone business. Manufacturing, marketing, sales, distribution, support, carrier agreements -- all on a global level. You don't want any company to roll all this out at once -- it would invite failure. Instead, rolling all these things out at a manageable pace ensures success.

Apr 17, 08 - 11:10 am Comment from: Amazin1

The iPhone, like a Ferrari, is a niche product - with exceptional margins! Or one can say it is the difference between Whole Foods and Safeway - one is an experience, the other is grocery shopping. Nokia makes fine products for the grocery store. They are not going to be able to deliver the "experience". That takes a special desire and special talent. A commodity manufacturer, Nokia, will unlikely ever be able to hire that talent because they do not have the required desire to deliver the experience. It is not in the culture. They will survive just fine, but beyond delivering the lowest margin product at the lowest price, they will have nothing else to offer.

Apr 17, 08 - 11:10 am Comment from: @ Mac+ - from the King of Slivers

Your last post is garbage. Stop now, you are making a damn fool of yourself.

'Open Mentality'? Bollocks.

Microsoft take advantage of multi-touch? LOL! yeah, with the big-ass table! What nonsense.

Next you'll be telling us that the zune is an ipod-killer.

Mac+, you are now officially a troll.

Apr 17, 08 - 11:12 am Comment from: AL

I think he forgot that the cellphone was a niche product when it first came out. Only the rich and extravagant could afford one.

Apr 17, 08 - 11:34 am Comment from: Quad Core

Niche product.....what a Pekka

Apr 17, 08 - 11:46 am Comment from: @MDN

Here we go again, lots of talk, very little facts.

Nokia has had an *excellent* profit margin 20-25% for years and years, much better than any other mobile phone vendor (excluding Apple now), just Google first and then spit out crap wink..yes the very low end phones have low margin, but it's still 20-25c one the dollar on average for the whole 400+ million phones, the rest cant match that - not even close.

And MDN, please quit with the bloodbath thing already, it is starting to sound extremely pathethic. Nokia couldnt care less if Apple sold 10, 20 or even 50 million phones this year as they will sell close to half a BILLION and they are not in any way dependant on the sales of their high end smartphones.

iPhone is the gizmo of the decade no doubt, but its way too overpriced here in Europe (the total package that is) to become the choice of the masses. Not everybody is a gimmick freak, most ppl just wants a simple phone.

It's funny btw that MDN only has 2 kinda articles here, the ones where Apple shines and the ones where somebody (usually a competitor to Apple) has failed in some way (with associated bashing involved).

Apr 17, 08 - 11:58 am Comment from: Jubei

With all that cocky talk from those morons, I hope Apple give them the smack down they deserve. SDK, June, 08 = Nokia losing a ton of users to Mac. grin

Apr 17, 08 - 12:05 pm Comment from: Buster

Nokia Chief Executive Olli-Pekka Kallasvuo was overheard calling Steve Jobs a 'poo-poo head".

Apr 17, 08 - 12:05 pm Comment from: Darkness

You know, it's perfectly alright to be the #2 vendor in any particular market. You still make a lot of money and satisfy your shareholders without being #1. I suspect Apple is very happy with their position in the PC market and the phone market--although they will be doing much better in both soon. I doubt if they want to be #1. They certainly don't need to be to still be successful.

Apr 17, 08 - 12:06 pm Comment from: Falkirk

"Nokia Chief Executive Olli-Pekka Kallasvuo on Thursday brushed off suggestions that Nokia needs to do more to fight back the foray of iPhone onto its home turf, calling it a 'niche product.'"

I can't understand comments like this. Intelligent salespeople know that insulting your competition only make you look bad. Whenever one speaks of their competition they should praise then distinguish. For example, the CEO could have said that Apple makes an excellent product and does a great job marketing their product. But our company (then use bullet points to highlight the unique aspects of their company).

When you insult a competitor you harm your credibility and you look crass and classless. I can't believe Major CEO's don't know better.

Apr 17, 08 - 12:13 pm Comment from: Buster

@Mac+...Apple business model sucks!!!!!!!

Well at least you didn't say SUX but everything else you say is silly. Apple makes money, tons of it. Apple is continually used in business school as an EXCELLENT model. Apple is respected world-wide for its innovation, design and over-all level of quality and customer satisfaction. Finally, their computer market share and phone market shares are going up and they already dominate the music market.

So exactly what part of all this sucks? Inquiring minds want to know!

Apr 17, 08 - 12:14 pm Comment from: BestOf

Right Falkirk and Jobs has never insulted Gates or his products?

Apr 17, 08 - 12:28 pm Comment from: Mark

Of course the iPhone is a niche product: it's only for people who want to make phone calls.

Or look at pictures. Or watch movies. Or play games. Or...

Apr 17, 08 - 12:31 pm Comment from: observer

Apple has sold an estimated 300 000 iPhones in Europe according to the businessweek story that Mac+ echoed.

I mean WTF, 300k in Germany, France, UK combined in 3 months???? ehhh..that is nothing, some bloodbath we are witnessing lol, time to change your businessplan in Europe Apple?

Apr 17, 08 - 12:47 pm Comment from: Mac-nugget

@Mac+
You don't get it. It's not that simple. Having the iPhone with no LOCAL iTunes store is only half the solution. Open the iPhone and kill half it's features?

Now thats a plan. Why didn't Jobs think of that?

Apr 17, 08 - 01:17 pm Comment from: Jubei

@BestOf

Except what Jobs says its 100% correct. Care to dispute that MS does mediocre, crappy products? Go ahead and post X-Box, you know the billion dollars loser and 30% failure rate. LOL

Apr 17, 08 - 01:25 pm Comment from: hi there

@buster

I love apple products and the mac business model works well currently, and the iphone business model works well in the US, but a model that works in one market may not in another, and the iphone has been seriously held back in europe because of the way its been sold, we often dont pay for our phones over here and because apple ask for a cut of monthly fees the contracts are poor value for money.

Obviously a lot of people have decided to wait for a 3g version over here too, well ever since it came out actually, lol

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