Nokia (NOK) 1Q:2008 Results

Nokia misses on the top line by about 110mm euro relative to consensus of 12.75b, coming in at 12.62b. Gross margins look ever so slightly light at 35.8%. Despite the top line weakness, operating margins were good. Average selling prices for handsets dropped to $79 from $83 quarter over quarter and down from $89 year over year -- that's what happens when you skew so heavily to low end phones like they do.

I've been saying you should be short this since Texas Instruments (TXN) reported as I had picked up low end strength with high end weakness in the supply chain. I had thought they'd have a margin miss due to the ASP pressure at the low end not being offset by the high end. Instead, they had a revenue shortfall.

At any rate, they're saying the cell phone market will contract in euro terms for this year. That hasn't happened in uh forever. As Nokia has been gaining share regularly, they'll be able to mitigate that somewhat. Numbers will come down regardless due to the shortfall in the current quarter.

I still think there's an awful lot of low end handset inventory sitting out there and their high end is moderating. Guidance should move lower.

The chart is terribly gappy but it telegraphs to the mid 20s.