Uh-oh. Nokia’s announcement a few hours ago that it would be falling well short of its Q2 2011 sales estimates seems to have made itself known, with the company’s share price promptly ditching almost 18-percent (at time of writing). The market reacted with as much nervousness as we’d expected, shares in the Finnish company crashing to €4.74 apiece from the €5.75 the market closed at yesterday.
That’s the lowest they’ve been in around 13 years, in fact, which certainly suggests that investors weren’t convinced by CEO Stephen Elop’s comments that “we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011.” Whether that’s a short-term stance, with shareholders jumping ship in the expectation that Nokia’s price will fall much further before those WP7.1 devices arrive, or a longer-term pessimism about Microsoft’s smartphone platform altogether, remains to be seen.
During the analyst call following the announcement, Elop blamed the rise of Android, management issues amid increasing challenges from HTC in China, and the ever-present Apple iPhone threat as the primary issues affecting the company’s profits. Operating margin for Q2 is now expected to merely breakeven rather than come in at anywhere up to 9-percent, as previously estimated, with Nokia’s current range treading water until the Windows Phone cavalry turns up.