Last Updated Jul 22, 2010 2:30 PM EDT
Nokia's net sales of â‚¬10 billion (roughly $12.9 billion) were up 1 percent year-over-year and 5 percent over the previous quarter. However, taking currency fluctuations into account, net sales were actually down 4 percent year-over-year and up only 2 percent over the previous quarter. Compare this to Apple's year-over-year growth of 74 percent. Granted, that includes a big jump in Mac sales, but iPad sales have been on a tear, and the release of the iPhone 4 will make 8.4 million iPhones the company sold last quarter look pathetic.
Even more telling are the unit numbers. Nokia sold a total of 111.1 million mobile devices. That's up 8 percent year-over-year and 3 percent over the previous quarter. However, according to Nokia's own estimates, the overall mobile device industry's device volume jumped by 14 percent year-over-year and 5 percent sequentially.
But let's look at some other data. Looking at IDC and Gartner data for the first quarter (second quarter estimates aren't out yet), we see estimated growth rates of 21.7 percent and 17 percent respectively. According to Nokia's earnings release from the same quarter, the company said that the overall mobile device growth was 11 percent year-over-year, and that its own sales were up 16 percent year-over-year.
It sure looks like Nokia vastly underestimated industry growth, making its own results look stronger in comparison. That casts down on its industry estimates for last quarter, and suggests that Nokia is doing far worse that the industry in general. That would fit with the Nokia's loss of 6.2 percent of European market share.
In today's release, Nokia says that its "converged mobile device" volume was 24 million units in the second quarter, up 42 percent year-over-year and 12 percent quarter-over-quarter. But sales of devices that use Google's Android are already at a 14.6 million unit a quarter pace. That number is 60 percent higher than the previous quarter.
Compare that to Nokia's quarter-to-quarter growth of 12 percent. Google has kept the high quarterly growth for at least six months now. Even if that rate drops to 40 percent -- and given that the Motorola (MOT) Droid X is already sold out and the rave reviews for the Samsung Galaxy S, that seems unlikely -- we're still talking about 20.7 devices this quarter ... and more than 23 million is more realistic.
By next quarter, the number could well be between 29 million and over 36 million, assuming the 60 percent growth rate can continue a few months more.
Unless the release of models using the new MeeGo operating system (a combined effort of Nokia and Intel (INTC) and Symbian 4 can dramatically increase the company's pace, there is simply no way it can keep up with Google. Apple's iPhone and iPad unit growth is less telling quarter over quarter. The iPad is a new product and the iPhone has a highly erratic growth that depends on annual new model introductions.
However, early iPhone 4 sales figures suggest that it has set the sales channel on fire. Combine all the iOS devices, and I think we'll see 17 million units this quarter at bare minimum, and a number closer to Google's is certainly possible. So what is Nokia going to show? More than 27 million or 28 million, keeping the same quarterly growth? And by next quarter, 31 million or 32 million? Maybe?
There's a good chance that Apple and Google will have passed Nokia in smartphone and tablets by the end of the year. Although the company will still be ahead of RIM, that will be a bitter pill to swallow. To stay ahead, Nokia must find a way to go beyond where its smartphone and tablet rivals are. And that will be difficult, indeed.
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