In the midst of high-profile negotiations involving companies like Amazon and Vivo, Nokia has declared that safeguarding the worth of its patent portfolio surpasses the pursuit of outcomes within specific time frames. Furthermore, they also acknowledged the difficult market circumstances currently prevailing, factors like diminishing customer expenditure and global economic upheaval among the causes.
In last week’s press release, Nokia stated, “The quarter has presented greater challenges than anticipated, considering the continuing customer spending restriction and recent customer purchasing decisions.” However, the company stays optimistic, expecting their network businesses’ profitability to maintain merit on par with past operating margin suppositions.
Despite their positive outlook, Nokia’s Q3 results painted a different picture with a 40% decline in net sales. To counter this slump, Nokia is planning to curtail costs by €1 billion by 2026 and implement a significant downsizing. Recently, they announced plans to terminate about 14,000 positions, scaling their workforce back to roughly 72,000.
Commenting on the Q3 results, Pekka Lundmark, President and CEO at Nokia, stated, “Our trust remains unbroken in the mid-to-long-term market but that doesn’t mean we’re going to stay idle and hope for an imminent recovery… we can’t predict when the recovery will happen.”
In another setback, last month, AT&T, a significant mobile networks client for Nokia, selected Ericsson to become their principal Open RAN equipment vendor over Nokia. Reacting to AT&T’s decision, Nokia termed it as “disappointing”, a sentiment echoed by the 8% fall in their share price following the announcement. In 2023, the contracts with AT&T were projected to constitute 5-8% of Nokia’s mobile networks net sales.
