Nokia (NYSE: NOK) sold 115 million handsets in the first quarter, an increase of 27% over the same quarter a year ago. The bad news is that the average yield-per-handset fell to 79 euros well down from 89 euros in the period a year ago.
Nokia’s net profit rose from 1.2 billion euros in the first quarter of the year, up from 980 million euros on the same period of 2007, an increase of 25%, But, Wall St. expected more and the stock is down 10%.
According to the AP "The Finnish company expects the mobile phone market worldwide to grow by some 10 percent in 2008 from its 2007 estimate of 1.14 billion units, but added that the average selling price across the industry would continue to fall during the year."
All of that is very bad for Motorola (NYSE: MOT). Nokia’s unit growth is faster than that of the overall market and there are signs that peers Samsung and Sony Ericsson are also growing quickly. The drop in average-price-per-phone and a falling market share are likely to do some real damage to MOT.
Douglas A. McIntyre
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