Nokia Meets Its Waterloo in China

In the face of the sudden cold spell in China's mobile phone market, even Nokia, the "top dog" of mobile phones, has been unable to find a safe haven.

On July 18th, Nokia released its second-quarter financial report for 2008. During this period, its net profit dropped by 61% year-on-year. However, if the impact of layoffs and accounting methods as special items is excluded, its net profit was $2.18 billion, an increase of 8% compared to the previous year. Nevertheless, in this barely satisfactory report card, the Chinese market has clearly become the Waterloo for Nokia's mobile phone business - Nokia's Greater China region saw a 16.2% decline in mobile phone sales in the second quarter compared to the first quarter. This is also the only region in Nokia's global sales map where mobile phone sales have declined.

"From this year's mobile phone market situation, a reduction of only 16.2% is already quite good," a mobile phone distributor in Shenzhen told reporters on July 19th. Since the beginning of the year, domestic mobile phone sales have experienced industry-wide "stagflation." Not only Nokia, but also Motorola, Samsung, Amoi, and Gionee, both domestic and foreign brands, have seen varying degrees of sales decline.

"If Nokia can experience such a significant decline, it's easy to imagine the difficulties faced by other brands (mobile phones)," the aforementioned person lamented to the reporter, stating that the pressure in the mobile phone business this year is unprecedented.