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Earnings Call: Nokia Confirms Touch Coming This Year; Raises 2008 Phone Forecast; Progress In U.S.

During the Nokia’s (NYSE: NOK) conference call, the company dove in a bit deeper when it came to some aspects of it’s Q2 earnings (Earnings Release | Conference Call). Here’s a look:

—On touchscreen devices: Nokia’s EVP of Devices Kai Oistamo: “We are fully committed to bringing out a complete portfolio of touch input devices to the mass market from the high-end to the low-end. We aim to appeal to the broadest part of the market, and leverage our scale in platforms, manufacturing and distribution. Our first touch device will be aimed at the volume part of the market. It’s competitively spec’d, considering the price point, and it’s scheduled to be out in the second half. Our platform approach to the software will allow us to roll out touch across the entire range from top to bottom, it’s just a matter of Nokia figuring out what features and what specs we want to include, such as GPS, Wi-Fi and Qwerty keypads.”

—2008 Global Forecast: Nokia now expects industry mobile device volumes in 2008 to grow 10 percent or more, which is up from its previous estimate of just 10 percent. Last year, Nokia estimated that the market would total about 1.14 billion units, which would mean global volumes in 2008 hitting at least 1.25 billion. CEO Olli-Pekka Kallasvuo: “We feel confident by the estimate given that we are already more than half way through the year and based on how we see the state of the market today.”

—Progress in the U.S.: Kallasvuo: “Our overall global marketshare was 40 percent in Q2, which is up 2 percent year-over-year, and up 1 percent sequentially. Sequentially we were up in all regions except China and Latin America.” In the U.S., device volume was up 80 percent sequentially in the US. “While I’m happy about making progress in the U.S., we have a lot more work to do to be satisfied with our position there.” As part of its North American strategy, in June, Nokia said it will ship the 6205 exclusively with Verizon (NYSE: VZ) and will start to ship it this month.

—Update on Services Business: The company said Software Net Sales totaled EUR 190 million, up from EUR 84 million in Q1, and that there was a lot of activity in the business. Sony (NYSE: SNE) BMG has joined Warner Music and Universal for Nokia’s Comes With Music service. Kallasvuo: “With these, we estimate we’ll have 80 percent of the global music catalog on Comes With Music when it launches later this year.” It launched 10 music stores at the end of Q2, and expects to have 14 by year-end. “We are still in the early stages of building our services business, but the unique advantage of our scale of devices is clear.” He said that 150 million Nokia devices have an application store on a phone, where they can have direct access to such services as Maps and N-Gage. “It’s not something we are yet fully leveraging, but it is an opportunity going forward. When you buy a selected device, we are providing Navigation for a certain period of time. We shipped 4.5 million GPS devices during the quarter, and we are bundling Navigation in with 50 percent of those.”

—Consumer segmentation: Kallasvuo: “We have done quite extensive segmentation, on how it’s developing, and what do consumers want going forward, and what kind of solutions they are asking for. The segmentation was extremely expensive, and was one of the biggest done by any company. It’s demonstrating that the market is moving up in terms of the engagement of the consumers, and we are seeing quite rapid progress in the technology engagement and solutions in all markets, including the U.S., quite interestingly, which has been relatively low earlier. It’s extremely encouraging when it comes to the implementation of our strategy of combining devices and services. There will be increasing demand for this, and this supports our theory.”

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Jul 17, 2008 3:04 PM ET

Posted In: Money, Earnings, Companies, Nokia

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