Experts predict a rise in sales of Nokia smartphones

© RIA Novosti / Maxim to Aminopherase in potamocorbula version of the classic mobile phone model Nokia 3310 (left). Archival photoExperts predict a rise in sales of Nokia smartphones© RIA Novosti / Maxim to Aminopherase the image Bank

Finland’s Nokia Corp., one of the world’s largest manufacturers of telecommunications equipment, in recent years, is losing its share in the smartphone market is extremely low, and the profit went negative; however, the company’s sales have grown, according to respondents RIA Novosti analysts.

Nokia, formerly one of the world’s largest manufacturers of cell phones, at the turn of the 2010s, lost their positions as the leading smartphone manufacturers. In 2013 Microsoft bought business of Nokia on production of mobile phones over 5.4 billion euros.

However, in may last year, Nokia signed a license agreement granting the company the exclusive right HMD for the creation of smartphones and tablets is a new generation under the Nokia brand for 10 years. Under the agreement, Nokia will receive payments from the HMD for the sale of mobile products under the Nokia brand, will provide the new company with rights to licenses and patents, and establish mandatory requirements for device performance, quality and design. In February, Finnish HMD presented a new version of the classic Nokia 3310.

Experts say that over the years Nokia has lost a significant share of the smartphone market, and sales through your existing HMD right is unlikely to help quickly restore it. However, analysts believe that sales of the Finnish company will continue to rise.

Lost domestic market

Few people know that Nokia is older than his home country of Finland: founded in 1865, and the country became independent only in 1917. Once Nokia had played a major role in the development of the economy: in 2000 Nokia accounted for 4% of Finland’s GDP, 70% of the capital Helsinki exchange, 43% of all corporate research and development, 21% of total exports and 14% of all corporate tax revenues.

After selling mobile business to Microsoft market share and the contribution of Nokia in the Finnish economy fell sharply. «The contribution of Nokia in the Finnish economy today is much lower but Nokia Networks (division of mobile communications — ed.) remains the world’s largest supplier of mobile networks and continues to have a major global impact,» — told RIA Novosti Executive Director of Strategy Analytics Neil Mouston (Neil Mawston). According to his estimates, sales of Nokia mobile phones now account for less than 1% of the total GDP of Finland.

While Nokia has evolved in the field of mobile networking, its share of the smartphone market, in particular software development, has taken any other Finnish company. Thus, according to the Deputy head and principal analyst of Institute of the Finnish economy Etlatieto Jyrki Ali Ircce (Jyrki Ali-Pcco), now the company Supercell, known for its mobile games, is about 0.5% of Finland’s GDP.

«Firms developing and selling software, such as Supercell, took some, but not all, share, lost a giant manufacturer Nokia,» said Mawston.

According to Jyrki Ali Ircce, Supercell will continue to compete with Nokia. «Supercell managed to create some very popular games. Thus, she has a great reputation, and its sales are likely to grow in the future,» he explained.

Just ahead of growth

Despite the fact that Nokia has lost a significant share of the smartphone market, particularly in the domestic market, the company still has the opportunity to increase global sales and to compete for a share of the world market, experts say.

«We expect that sales of Nokia smartphones (HMD) will grow well this year, but they still would represent less than 1% of all global smartphone shipments. The firm have a long way to recovery,» says Mawston.

Jyrki Ali Ircce believes that Nokia can compete in the global market not only due to the sales of smartphones with its brand, but also the proceeds for the patents. Revenue growth is also expected as part of a unit of mobile communication, since the amount of data transferred via mobile devices is growing rapidly, he said.

«Nokia has lost all his business by mobile devices, including smartphones. However, Nokia has intellectual property rights on their patents. In addition, Nokia receives some minor revenues from licenses of the company’s HMD, which has the right to use the Nokia brand on its mobile phones. In coming years, the sales of Nokia will probably steadily increase,» the expert predicts.

Positive forecasts of experts confirmed the financial performance of Nokia. The loss of the Finnish company in the first half of 2017 amounted to 896 million euros, a decrease of 31% in annual terms. The net loss in the second quarter decreased by 37% to 423 million euros. At the same time, quarterly revenue in annual terms increased by 1% to 5,619 billion euros. Improvement the company attributed to the successful implementation of its strategy of gradual cost reduction, with the objective of 1.2 billion euros of savings in 2018.