Things will probably get worse before they get better for Nokia (NOK) and Motorola (MOT) shareholders, who have seen their shares tank this year. Credit Suisse analyst Kulbinder Garcha whacked Q2 estimates for both mobile phone makers today based on “weaker than expected” demand for mobile phones.
Where’d he get that idea? In part, because of recent scary comments from Sony Ericsson, mobile phone distributor Brightpoint (CELL), and Texas Instruments. Garcha’s own checks also suggest sales are below expectations because of weak demand in Western Europe (Nokia’s home turf) and China (growth market).
Nokia: For the rest of the year, Garcha is also concerned about increasing competition in the smartphone market; we assume he’s referring to Research In Motion (RIMM), which is rolling out its BlackBerry gadgets in more markets, and Apple’s (AAPL) iPhone 3G, which goes on sale in more than 70 countries this year. For now, Garcha cut his Q2 revenue estimate by 2% to €12.4 billion, below consensus of €12.9 billion; and EPS by €0.02 to €0.36, below consensus of €0.37.
Motorola: More “significant” market share loss in North America (down 500 basis points to 20%) and Europe, Latin America, and China. Garcha estimates 23.1 units in Q2, down 35% year-over-year. He cut Q2 revenue estimates 3.4% to $7.0 billion, versus consensus $7.8 billion; and EPS to -$0.03, in-line with -$0.03 consensus.
Nokia shares are down 0.7% to $24.34. Motorola is trading down 0.3% to $7.04.
RIM’s Rapid Growth Plan: A $49 BlackBerry Flip Phone?
Motorola Still Foundering, No Quick Fix In Sight
Nokia Blindsided By iPhone, BlackBerry — No ‘Credible’ Answer
Where Nokia Could Fail: Competing With Apple And RIM
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.