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Nokia’s distribution channels in China are “breaking down,” with resellers nationwide beginning to refuse shipments for the first time, Marbridge Daily reports. It said that the vendor failed to anticipate demand at the end of 2010, leading to a “serious shortage” of stock. This meant that some orders were not met until early in 2011, and that while late shipments arrived at reseller and distributor warehouses, these “were never sold on to customers.” This meant that while Nokia’s own numbers were saved, “few resellers or distributors turned a profit.” In addition, with demand for Nokia products tailing off, the time taken to clear stock has “gradually lengthened,” with “little optimism” that the situation will improve.

In the second quarter of 2011 (to 30 June), Nokia shipped 11.3 million devices in Greater China, a fall of 41 percent year-on-year. This drop of 8 million units was the vendor’s biggest decrease across all of its operating regions. The company also saw a 34 percent decrease in sales in Greater China, to EUR913 million from EUR1.37 billion, making it Nokia’s fourth biggest region – falling from third place in Q2 2010, displaced by MEA.