Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

Summary: Is Nokia is prepared to carpet bomb the planet with Windows Phone 7 devices hitting every price point so it can recover from its lost 2011?

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For Nokia CEO Stephen Elop, the launch of Windows Phone 7 devices can't come soon enough. After all, Elop has to be tiring of talking about Nokia's dreadful financial picture. One big question is whether Nokia is prepared to carpet bomb the planet with Windows Phone 7 devices hitting every price point so it can recover from its lost 2011.

And the other big question: Will consumers buy these devices?

On a conference call with analysts following another disappointing quarter, Elop said that Windows Phone 7 will open up new markets and geographies to Nokia. "With Windows Phone 7 there are market opportunities that open up to us," said Elop. Specifically, Windows Phone 7 Mango devices will bring the company to CDMA markets. Nokia will also appear in more markets---let's assume the U.S. would be one emerging market for the company.

Elop wasn't prepared to detail anything about specific Windows Phone 7 plans, but hinted announcements would come. Analysts are expecting Nokia's earnings call three months from now to yield more concrete information. For now, Nokia is merely hinting at what's on deck.

For analysts, the only thing that matters for Nokia is the Windows Phone 7 launch and its follow up. And frankly, the follow up may be more important. Analysts are even willing to overlook another weak quarter because no one is surprised by it. Barclays Capital analyst Jeff Kvaal said in a research note:

The near-term outlook still remains difficult, with a relatively stale product portfolio, meaning 3Q will be another weak quarter for revenue, although margins are expected to be slightly better than forecast. The key for the stock, however, remains Nokia's portfolio transition at the mid-range and high-end, regarding which we will start to gain greater insight later in 3Q11 as Nokia's first WindowsPhone nears launch. We also consider it key for Nokia to follow up rapidly the first launch with additional WindowsPhones at lower price points in order to refresh the key mid-range of their portfolio.

The upshot to Kvaal's take is that Nokia can't win with one super Windows Phone 7 device. The company needs to machine gun them around the globe quickly so it can defend its market share and then dent Android.

In the meantime, Nokia continues to walk through its personal valley of death and the disappointing quarters that come from being shellacked by Android and Apple around the world. Nokia posted a loss of 368 million euro ($523 million) as sales fell to 9.28 billion euro, down 7.3 percent from a year ago. But those bottom line figures don't tell the true tale. Check out the device sales plunge.

And then the carnage by region.

Elop noted that the results were "clearly disappointing," but at least Nokia flushed out excess inventory and revamped management. Nokia is just trying to stabilize until Windows Phone 7 saves the day---maybe.

Also see: CNET: Nokia reports big Q2 losses, but CEO notes progress

Related: Nokia launches N9: Hints at Windows Phone 7 approach

Topics: Mobility, Microsoft, Nokia, Operating Systems, Software, Windows

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40 comments
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  • bankrupt soon

    Nokia posted a loss of 368 million euro with netcash and other liquid assets of 3.9 bn euro at the end of that quarter. at this pace nokia will be bankrupt at the end of 2013.
    bannedfromzdnetagainandagain
    • Sad thing is the N9 looked really darn good.

      @bannedfromzdnetagainandagain

      I don't think Elop actually planned on the N9 being really darn good. The UI looked darn clean, minimalist and powerful. A hard combination.
      Bruizer
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @bannedfromzdnetagainandagain
      Yes but keep in mind Apple was in the same spot back in 1997... things change. Now if MSFT will pay Nokia, they will be fine but if I was Nokia I think I would have gone with Android
      Hasam1991
      • They should have stayed with Meego

        @Hasam1991

        The N9 really looked nice and was well thought out IMO.
        Bruizer
      • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

        @Hasam1991 Exactly. These bloggers love to talk down companies they don't care about like it's personal. Larry Dignan is no exception.
        mrvee@...
      • There's no future as YAAF (Yet another android phone)

        @Hasam1991 There are far too many adroid phones and they are all the same. The only reason iPhone is so important is because all the revenue clings to one company for it. Without being a single phone that's awesome, Nokia won't get the content deals. And without content, your just a bunch of icons and so-so apps.

        Nokia needs to to bring itself out of the haze of Adroid or die. I'm not sure if they can do it. To be fair, there are people who will unexplainably jump under a moving bus for Apple. Apparently its cool to wear sweaters and insult everyone's intelligence by talking down to them with a smug smile.
        A Gray
      • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

        @A Gray

        An just as Apple has exclusive rights to iOS, Nokia is going to be the only one making WP 7 phones. That is because Microsoft gave Nokia a subsidy and special rights, and so the other mobile OEM's are going to drop it.
        Eduardo_z
    • Get money

      @bannedfromzdnetagainandagain
      I think they can get money from Microsoft. They are important for MS as long as other channels for selling WP7 are not working. MS did spend already a lot on WP7, but have a vast income from a few markets with little competition.
      bezoeker
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @bannedfromzdnetagainandagain Could well see the end of Nokia, awful losses <a href="http://www.global-djs.net">DJ agency</a> <a href="http://www.urban-djs.net">DJ agency</a>
      mrswilliamson
  • Has any handset company gone into the red and recovered?

    Long term? Once a handset company goes in the red, I question its ability to thrive again.
    Bruizer
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @Bruizer
      Motorola?
      paul2011
      • Nope.

        @paul2011

        Already spun off as MMI and that is also in danger. Ericson? Sony? Combined to form SE. LG is doing poorly in mobile and I bet they exit soon.

        Palm? Handspring? It seems once they go red they exit or get acquired.
        Bruizer
  • Message has been deleted.

    Rodeny56
  • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

    WP will kill Nokia because WP 7 just sucks, it's no where near to Android and iOS. They should go with Android instead
    shellcodes_coder
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @shellcodes_coder
      The reviews all say otherwise.
      x I'm tc
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @shellcodes_coder You Idiot!! WP is refreshing and a modern UI which is coming to the 360 and Windows 8.
      It is a move away from taskbars and icons!!!
      jatbains
    • At this point, I wouldn't agree

      Android is being squeezed for every penny people can litigate from it.
      Michael Alan Goff
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @shellcodes_coder
      Were all of your Mother's childern brain dead?
      ChoMlo
    • BS - you're saying that because you're just upset

      @shellcodes_coder
      that it's getting good reviews, and better customer satisfaction then Android.

      Just deal with it.
      William Pharaoh
    • RE: Nokia: Q2 dreadful, but at least it's closer to Windows Phone 7

      @shellcodes_coder Android? Why would any OEM want to go with Android when its proving to be a bigger legal liability with each passing day? Android is going to fall as quickly as it came to prominence. Microsoft would probably actually like to see Android succeed though because with all the patent infringements that is haunting Android, MS would make a killing off it. :-)
      Tiggster79