Nokia has commented on factors impacting its business and updated its second quarter and full year 2011 outlook for Devices & Services. The handset manufacturer commented that during the second quarter 2011, multiple factors are negatively impacting Nokia’s Devices & Services business to a greater extent than previously expected. These factors include:

– the competitive dynamics and market trends across multiple price categories, particularly in China and Europe;
– a product mix shift towards devices with lower average selling prices and lower gross margins; and
– pricing tactics by Nokia and certain competitors.

Updated outlook for Devices & Services for the second quarter 2011:
– Nokia now expects Devices & Services net sales to be substantially below its previously expected range of €6.1 billion to (US$8.8 billion) €6.6 billion for the second quarter 2011. This update is primarily due to lower than previously expected average selling prices and mobile device volumes.
– Nokia now expects Devices & Services non-IFRS operating margin to be substantially below its previously expected range of 6 per cent to 9 per cent for the second quarter 2011. This update is primarily due to lower than previously expected net sales. While visibility is very limited, Nokia’s current view is that second quarter 2011 Devices & Services non-IFRS operating margin could be around breakeven.

Updated outlook for Devices & Services for the full year 2011:
– Given the unexpected change in our outlook for the second quarter, Nokia believes it is no longer appropriate to provide annual targets for 2011. However, Nokia expects to continue to provide short-term quarterly forecasts in its interim reports as well as annual targets when circumstances allow it to do so.
– Nokia’s previous targets for the third quarter, fourth quarter, and full year 2011 were: 1) net sales in Devices & Services to be at approximately the same level in the third quarter 2011 as in the second quarter 2011, and seasonally higher in the fourth quarter 2011, compared to the third quarter 2011; 2) Devices & Services non-IFRS operating margin to be between 6 per cent and 9 per cent in 2011. These targets are no longer valid.

Nokia is taking immediate action to address the issues that are impacting its Devices & Services business. Nokia’s high-level strategic objectives and targets remain unchanged.

– Nokia is continuing to invest to bring new innovative capabilities to its Symbian line up. In addition, Nokia has taken price actions on its current smartphone portfolio, and Nokia is intensifying its focus on retail point-of-sales marketing.
– Nokia started shipping its new dual-SIM devices.
– Nokia remains pleased with its progress on its Windows Phone strategy, and has increased confidence that the first Nokia product with Windows Phone will ship in the fourth quarter 2011.

“Strategy transitions are difficult. We recognise the need to deliver great mobile products, and therefore we must accelerate the pace of our transition,” said Stephen Elop, president and CEO of Nokia. “Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011.”

Network operators are being advised to seek organic means to growth as opposed to acquisitive inorganic ways, given the limited motivations and appetite for such transactions. However, with network operator Q1 results typically showing a pattern of flat top-line growth and declining profitability, a serious issue arises as to what exactly network operators need to do in internally in order to boost their growth prospects

As the telecom sector in the Middle East matures, network operators are struggling to keep growing their revenues at the double-digit rates of the past

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At the end of April pan-regional MVNO Friendi Group announced it secured an additional US$25 million of new funding from existing and new shareholders. The investment is aimed at further accelerating expansion plans across the Middle East, Africa and Asia region, setting the company on course for an initial public offering in another 2-3 years time

Vinter said he was very satisfied with the different sources of the latest round of funding

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Batelco is understood to be reconsidering its Indian expansion strategy following the intensification of operating conditions in the mobile market and regulatory restrictions that are pushing up costs.

Batelco brought a 49 per cent stake in Indian’s S Tel for US$225 million in January 2009, although it later sold an 11 per cent stake to Global Banking Corp. for an undisclosed amount.

Peter Kaliaropoulos, Batelco’s CEO was quoted as saying the market was proving to be far more challenging than expected and that the slashing of phone call tariffs had been worse than even the “worst case scenarios” the company modelled when analysing the initial investment.

Kaliaropoulos added that S Tel had also suffered as a result of restrictions that the Indian government imposed on the import of telecom equipment from China last year.

The ongoing telecom licensing scandal is also making it difficult to raise funds for the company, although it has not been cited in any of the allegations so far.

S Tel has licenses to operate in six Indian states – Bihar, Orissa, Jammu & Kashmir, Himachal Pradesh, North East and Assam.

UAE distributor EMS will distribute the BlackBerryPlayBook tablet from Research In Motion (RIM) through select retail outlets across the region from June12.

“We are very excited to be bringing the eagerly-awaited BlackBerry PlayBook to the UAE,” said Babar Khan, CEO of EMS. “After experiencing a successful launch in North America we look to continue this within our region, where smartphone penetration is very high. With features such as seamless integration with a BlackBerry smartphone, Docs To Go for document editing and HDMI output, we expect the BlackBerry PlayBook to become an essential tool for this region’s businesses.”

The PlayBook was first launched in the US on April 19.