Nokia sales up but profits take a tumble

Any more results like this and it will be in trouble, analyst warns

Nokia has announce a fourth quarter operating profit of €884m, down 23 per cent year-on-year from €1.1bn.

However, net sales for the same period were up six per cent, and up 23 per cent on Q3 2010.

The company is losing ground in the burgeoning smartphone sector, and Gartner analyst Nick Jones argued that the company must begin to compete with Apple and Android devices in the high-end smartphone market. It also needs to define its tablet strategy, he said.

Unlike other smartphone operators, Nokia has made it clear that it is interested in both producing devices and creating an ecosystem for which it will need a more advanced platform than Symbian, currently being used for its midrange smartphones. Many other operators, such as Samsung, merely produce their own devices.

"Nokia remains the world's largest smartphone manufacturer; it is making money but isn't as profitable as it should be. It isn't in trouble yet but needs to turn things around by the end of this year," Jones said.

"If it doesn't do that, it might really be in trouble," he added.