Nokia's Elop: Lumia 'actual sales have been mixed'

Nokia's Elop: Lumia 'actual sales have been mixed'

Summary: Nokia runs into Lumia launch challenges in the U.K. and overall sales so far have been mixed.

SHARE:

Nokia CEO Stephen Elop said that the company's Lumia launched to "encouraging awards and popular acclaim," but "actual sales results have been mixed."

Elop made the comments in Nokia's earnings statement. Nokia reported first quarter results in line with its profit warning.

The Lumia launch is critical to Nokia given it is under fire in emerging markets and at the low end of the phone spectrum. Here's Elop's assessment.

We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging.

Meanwhile, Elop said that it has to battle on the feature phone end of the spectrum. Nokia will renew its Series 40 platform, fill product gaps and largely compete on price.

The crunch on the high end and low end of the device market could be deadly for Nokia. On one hand, Elop said it will ramp Lumia advertising and new features with "a clear sense of urgency." On the other side of the equation, Elop noted that it will be aggressive on the low end of the market while conserving cash.

Conserving cash may become a bigger concern. Nokia's cash position in the first quarter fell 24 percent from a year ago. Sales in the first quarter were hammered across the board. This table highlights all you need to know about Nokia's standing. It's Lumia or bust.

Analysts were mixed on the news. Among the positives and negatives:

Positives:

  • Nokia is streamlining. Nokia has removed layers of sales manager and intends to improve customer focus. The catch? Colin Giles, executive vice president of sales, is stepping down, but Wedbush analyst Scott Sutherland said more execs need to go. However, Nokia wants new sales blood.
  • The Lumia launch went well in the U.S. Sure, Nokia said Lumia sales were mixed in the first quarter, but the U.S.---an emerging market for Nokia---looks decent, said analysts.  CNET's Maggie Reardon noted that Nokia benefited from better training for the sales reps.
  • Nokia acknowledges its issues. The company said it will continue to cut costs and has been transparent. Transparency, however, doesn't book revenue. Wall Street appears to appreciate the effort at least.

Negatives:

  • Nokia doesn't have much of a lower-end phone plan. The company said it would reinvigorate its low-end phones. But it has to compete with an Android army. Feature phones are now touch and blending into smartphones. Good luck Nokia. Jefferies analyst Lee Simpson said in a research note:

The portfolio focus will likely be on series 40 (7 new Asha devices) in 2Q12. Here (lower price tiers) Nokia is subject to considerable pricing pressure from rivals with better or improving cost controls and full touch UI.

Translation: Samsung, Huawei and ZTE are expected to eat Nokia's lunch.

  • Windows Phone staying power questions. Simpson said that potential Lumia 900 buyers may be turned off by upgrade capability---Microsoft Windows Phone 7.5 devices can't be upgraded---and that may spook customers. Meanwhile, there are Android and iPhone 5 rollouts on deck.
  • China is tough. A lot of Nokia's issues are in China. It's unclear whether Nokia can compete with homegrown handset makers on price.

Topics: Enterprise Software, Nokia

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

25 comments
Log in or register to join the discussion
  • Lumia or Bust ?

    Not sure why it is "It???s Lumia or bust" other than that is what Elop has decided. Meego is waiting in the wings and Symbian still does everything significant that Windows Phone does (I don't consider X-Box functionality significant, some may). Microsoft is in control of where Windows Phone OS is going, Nokia is not. Symbian and Meego are still within Nokia's control.
    jkohut
    • Wealthybar.com where you can meet millionaires

      Life is so lonely .I am a rich and single man at present .I need a woman who can love me back .I also uploaded my hot photos on Wealthybar.C om under the name of jeff1098..It???s the largest and best club for seeking CEOs, pro athletes, doctors, lawyers, investors, entrepreneurs, beauty queens, fitness models, and Hollywood celebrities.Please Check it out!I???m serious.3333333
      wobuxiaode2
  • Lumia 900 due out in UK in May

    Which is what I am waiting for.
    psychobdelic
  • Nokia's Elop: Lumia 'actual sales have been mixed'

    Give it time and they will be back on track. If they can work out a deal with Verizon they would be doing extremely well in the U.S., enough so that it will cover them until they get sales and phones in other countries.
    Loverock Davidson-
    • do not hold your breath

      for a love affair between Nokia and Verizon. Unfortunately they broke up several years ago for the reasons unknown to me, and as much as I would like to buy Nokia products from Verizon, it is not likely to happen any time soon.
      ForeverSPb
      • Sadly I agree

        I'd really like to see Nokia Lumias on Verizon but doubt that will happen, at least not any time soon.
        Loverock Davidson-
    • Loverock said the same thing about Kin

      This is too hilarious...you have FAIL written above your toilet every morning when you sit down to pee.
      http404
  • We have always been at war with Google

    Your Ministry of Truth reminds you that Windows Phone is an unstoppable force. Google and Apple will be driven before it, and you will hear the lamentations of their women. Just you wait. It's going to happen Real Soon Now. Any day.
    Robert Hahn
  • Why are sales mixed?

    Simple.

    1) Contrary to the MS propaganda, not everyone wants tiles.

    2) There isn't room for an infinite number of incompatible app ecosystems. For better of worse, it's IOS and Android. Blackberry is done. Symbian is a dead end.

    As far as Phone7/8, MS can push it forward, but it will be like Apple pushing OSX in the desktop world. I don't see Phone7 ever getting more than 10-15% of the phone market because it's late to the game, and the development and hardware standard is Apple -- just like the office/corporate standard continues to be wintel.
    croberts
  • What everyone seems to be missing...

    Windows Phone 7 is a stop gap. It was meant to introduce the brand, build a little momentum, and introduce the new Microsoft design philosophy. Windows Phone 8 is the mass market device. Why? Because, Windows Phone 8 will support Windows 8 apps. Maybe not a 100% out-of-the-box, but it will be trivial to port between the two. Windows 8 will be a mass market product, and Microsoft will leverage that success to build up its Phone market share. The Nokia devices this year were just meant to slow down its decline. The end goal was to position Nokia as the high end Windows Mobility brand. That is why Nokia signed on with Microsoft. Not because it was hail mary bet on Windows Phone 7, but it was because they knew that Microsoft's end goal was a united ecosystem between Phone, Tablet, and Desktop. And, both companies knew that this was the only value proposition that could compete with Apple and Google.
    madoublet
    • Yeah, ok....

      I'm sure Nokia decided to bet its very existence as a company (they'll likely be bankrupt inside of a year), on a stop-gap WP7 strategy.

      And I'm sure Nokia shareholders who have taken a bath over the last couple of years, are all kosher with the destruction happening in the company's business.

      But, hey! Microsoft has some vague power fantasy that Windows desktop, tablet and mobile will unite, like Voltron, at some undetermined point in time, and make them top dog over iOS and Android!
      Theseus
      • You forget

        Stephen Elop is a Microsoft Employee. Specifically he works in the WP 7 division. He would know better than anyone what's coming out when and how.
        Jumpin Jack Flash
  • But don't tell anybody

    That's right. It might look for all the world like Microsoft is falling on its face in the mobile market, and Nokia too. But that's because they secretly [i]planned[/i] to look like they were falling on their faces in order to distract everyone. Meanwhile, behind the scenes, Really Great Secret Stuff is happening that will soon -- Real Soon Now -- deliver a mighty blow to all who oppose the Giant of Redmond!
    Robert Hahn
  • Verizon necessary in US.

    To be successful in the US Nokia is going to need a Verizon entry. I am not happy with my Droid, but will not change from Verizon, whose coverage is just better than that of other suppliers. I don't want to go with Apple, but will when my contract goes out unless a better Windows phone is available. PS Tiles are ugly, but they work great.
    hayneiii@...
    • Exactly

      Lots and lots of the country it's verizon or nothing. Any other phone will just be a paperweight as no cell service.

      I'm stuck on verizon, my contract ran out, but I'm sticking with my BB storm 2, even with a cracked screen. Does everything I need (especially exchange email, best of any phone)and not going to have verizon on my back for 2 more years for a new phone I barely want as there current selection is iphone or droid (boring)

      I would probably switch to att for the lumia but not having service, i'm SOL
      everss02
  • Incompatibility Windows Phone 7.5 Devices and Windows Phone 8

    Neither compatibility nor incompatibility has been confirmed. Simpson's assessment is pure speculation.
    WebSiteManager
  • Microsoft = Loser Denial

    They are going to keep fudging the numbers and report mixed and confusing figures until WP7 slowly fades into obscurity and no one notices.

    Except the non-sheeple.
    http404
  • ELOP....one letter away

    From FLOP.
    http404
    • Or Elope ... scrabble anyone?

      ... I wonder if Nokia has an R&D lab where their Lumia is running Android....
      croberts
  • Memo

    Maybe if Elop didn't release that stupid "burning platform" memo sales of Symbian devices wouldn't have collapsed internationally in such spectacular fashion.
    JRonin