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Nokia has announced that it is set to miss its financial year targets for 2023 after a weak last quarter and numerous licensing renewal agreements were not closed by the end of the year
The company noted that intense negotiations between the relevant parties (including Vivo and Amazon) and courts are ongoing, saying it will prioritise protecting the value of its patent portfolio over achieving results within certain timeframes.
Nokia also cited challenging market conditions for their results, Including reduced customer spending and global economic instability.
“The quarter has proved somewhat more challenging than expected given on-going customer spending constraint and the recently communicated customer purchasing decision. Profitability in Nokia’s networks businesses is however expected to remain solidly within the comparable operating margin assumptions the company had previously communicated,” said Nokia in a press release last week.
Nokia’s Q3 results showed the company’s net sales were down 40%.
In an attempt to combat their poor performance, the company is aiming to shrink its costs by €1 billion by 2026. As part of this process, Nokia has recently announced that it will cut 14,000 jobs, reducing the company workforce to around 72,000.
Speaking on its third quarter results, President and CEO Pekka Lundmark said: “We continue to believe in the mid-to-long-term market, but we are not going to sit and wait and pray that the market will recover anytime soon…we simply don’t know when it will recover.”
In related news, last month America’s AT&T selected Ericsson over Nokia to become the operator’s main Open RAN equipment vendor. Nokia described the decision as “disappointing”, with their share price plummeted 8% upon the news.
Contracts with AT&T represented 5-8% of Nokia’s mobile networks net sales in 2023.
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