Disclaimer: Nokia growth in year 2010 has been addressed in this blog before, it is not the topic of this post.

In this post I want to address the story how Nokia handsets had their record quarter in the fourth quarter of year 2010. It is a story widely quoted by Tomi Ahonen (mobile analyst, speaker, author of sorts) – and it has severe disconnection from reality.
Let’s start by hearing some of the quotes from Tomi Ahonen:
NokiaWasGrowingNotShrinkingAndMadeRecordProfits
–Tomi Ahonen, July 17th, 2014 [1]

nokiaReportedNokiaRecordProfitInTheHandsetUnitByQ4AndSmartphoneUnitRecordProfitInQ4PoweredByN8
–Tomi Ahonen, September 23rd, 2014 [2]

BothNokiaDumbphonesAndNokiaSmartphonesReportedGrowingRecordProfits
–Tomi Ahonen, October 24th, 2014 [3]

That was all phones. Do we have something for the smartphones?
SmartphonesRecordUnitRevenueProfitASP
–Tomi Ahonen, February 3rd, 2016 [4]

Okay, let’s go for the actual handsets unit (Devices&Services) data from Nokia quarterly reports:

Nokia quarterly results:
quarter All phones
units
(million)
Devices&Services
net sales
(billion €)
Devices&Services
operating
profit
(billion €)
All phones
ASP
(€)
Smartphones
units
(million)
Smartphones
net sales
(billion €)
Smartphones
ASP
(€)
Q1 2007 91.1 8.16 1.25 89 11.8
Q2 2007 100.8 9.16 1.78 90 13.9
Q3 2007 111.7 9.24 1.96 82 16.0
Q4 2007 133.5 11.14 2.54 83 18.8
Q1 2008 115.5 9.26 1.96 79 14.6
Q2 2008 122 9.09 1.82 74 15.3
Q3 2008 117.8 8.61 1.60 72 15.5
Q4 2008 113.1 8.14 0.98 71 15.1
Q1 2009 93.2 6.17 0.64 65 13.7 2.6 190
Q2 2009 103.2 6.59 0.80 62 16.9 3.1 182
Q3 2009 108.5 6.92 0.79 62 16.4 3.1 191
Q4 2009 126.9 8.18 1.26 63 20.8 3.9 186
Q1 2010 107.8 6.66 0.80 62 21.5 3.34 155
Q2 2010 111.1 6.80 0.65 61 24.0 3.43 143
Q3 2010 110.4 7.17 0.75 65 26.5 3.61 136
Q4 2010
“record quarter”
123.7 8.50 0.96 69 28.3 4.41 156

(From sources [5][6][7][8][9][10][11][12][13][14][15][16])

Nokia record profits in all handsets? Q4 2007, not Q4 2010.
Nokia record revenues in all handsets? Q4 2007, not Q4 2010.
Nokia record units shipped in handsets? Q4 2007, not Q4 2010.
Nokia record ASP of all phones? Q2 2007, not Q4 2010.
Nokia record ASP of smartphones? Q3 2009, not Q4 2010.
(Smartphones ASP record most likely took place in Q2 2007 but Nokia did not report smartphone ASP back then.)

Please note: Nokia handsets unit record profit is over twice the profits of alleged “record quarter” of Q4 2010.
Only parts here that actually match to Tomi’s babbling are smartphone unit sales and smartphone revenues which indeed have their record in Q4 2010. But on the other hand, are we surprised? It was the quarter where new flagship phone from Nokia was shipped first time for over a year (in literal millions of units sent to stores across the globe) and at the same time it was the Christmas quarter of a market with exploding growth. Quarter like that should deliver record units and revenue, even though Nokia lost market share during the year and that quarter too. More accurate question is if it was going to continue.
And nevertheless anything Tomi was talking that wasn’t about smartphone revenues and units is plain FUD.

Please also note that Nokia does not report smartphone unit profits. For his calculations Tomi has taken all of the handset unit profits and divided them by the share of total revenue. That – of course – is invalid as the profit margin per device sold is different and costs of the business unit (factories, R&D, marketing, etc.) are not equal. It also spreads the Services profits (or losses) evenly to dumbphones (which are not using that much of the services) and smartphones (which are using the most). That’s why I don’t have the number here but with the Tomi math used it’s obvious smartphone unit showed record profits too. 😉

Fourth quarter of 2010 is a good quarter. Christmas quarter always is. But it was not the record quarter as the Christmas quarter from 2007 was the REAL record quarter with record profits, record unit sales, record revenue and higher ASP of all phones.

REFERENCES:

[1] https://twitter.com/tomiahonen/status/489989477046054915

[2] https://twitter.com/tomiahonen/status/514363023335510016

[3] https://twitter.com/tomiahonen/status/525741866747461632

[4] https://twitter.com/tomiahonen/status/694927793885327360

[5] http://company.nokia.com/sites/default/files/download/investors/q1-2008-earnings-release-pdf.pdf

[6] http://company.nokia.com/sites/default/files/download/investors/q2-2008-earnings-release-pdf.pdf

[7] http://company.nokia.com/sites/default/files/download/investors/q3-2008-earnings-release-pdf.pdf

[8] http://company.nokia.com/sites/default/files/download/investors/q4-2008-earnings-release-pdf.pdf

[9] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2009q1e-pdf.pdf

[10] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2009q2e-pdf.pdf

[11] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2009q3e-pdf.pdf

[12] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2009q4e-pdf.pdf

[13] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2010q1e-pdf.pdf

[14] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2010q2e-pdf.pdf

[15] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2010q3e-pdf.pdf

[16] http://company.nokia.com/sites/default/files/download/investors/request-nokia-results2010q4e-pdf.pdf

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