Nokia reports big loss despite strong Windows Phone sales
Summary
Topics
Nokia CEO Stephen Elop shows off the Lumia 900 at CES 2012.(Credit: Lori Grunin/CNET)
Change is never easy. Just ask Nokia, which on Thursday posted its third consecutive quarter of hefty losses, despite strong sales of its new Windows Phone portfolio.
For the fourth quarter, the Finnish handset maker said it lost 1.07 billion Euro or $1.4 billion. During the same period a year ago, the company posted a 745 Euro profit.
Overall handset sales dropped by 29 percent compared to a year ago in the fourth quarter. The company sold 19.6 million smartphones during the quarter and 93.9 million feature-phones. In total it sold 113.5 million devices, which is down from 123.7 million total devices in the fourth quarter of 2010. Nokia also saw prices for its handsets fall. The average price for a handset in the fourth quarter was 53 Euro compared to 69 Euro a year ago.
Profit margins also fell considerably on mobile handsets to 3.4 percent. A year ago, Nokia reported profit margins of 12.7 percent on devices. And in the third quarter it reported 12.1 percent.
On the bright side, the company's new Lumia smartphones that use the Windows Phone operating system are selling well. Nokia CEO Stephen Elop said in a press release that the company has already sold well over 1 million Lumia handsets.
Nokia, once the worldwide leader in cell phone sales, has seen sales slip since the introduction of the Apple iPhone in 2007. And Google's introduction of the Android OS only made things worse for the company. In February last year, Elop, the newly appointed CEO, announced that the company would abandon its older Symbian operating system and adopt Microsoft's Windows Phone platform for all new smartphones. The company lost several months as it switched gears. And it's now just churning out products.
The company launched the Lumia line of devices in October in Europe with two devices, the Lumia 800 and Lumia 710. Nokia began selling the Lumia 710 this month on T-Mobile USA. And it's gearing up for a big push in the U.S. with the new Lumia 900, which will operate on AT&T's network. Elop had said at the Lumia 900 launch in Las Vegas at the CES show earlier this month that the company will be aggressive with pricing on the new devices to entice customers.
And on Wednesdsay there was a leak that Nokia will offer the new Lumia 900, which is the first LTE Windows Phone device, at $100 wit a two year contract. The new device will go on sale in March.
While it seems that Lumia line of devices is gaining traction, the company still has a long way to go. Aggressive pricing may give the company a tiny foothold in the U.S., but it's clear that the transition away from its older Symbian operating system to the new Windows Phone platform has not been easy.
About Marguerite Reardon
Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies.
Talkback Most Recent of 15 Talkback(s)
-
It makes sense. No change happens overnight
and it would be foolish to think otherwise.
William Farrel26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
@William Farrel
According to you, they will be foolish for thinking?
Like say, it was a very bad idea/move.
Maybe they had to sleep on it overnight.
A little thinking beforehand may have been in order.
Return_of_the_jedi26th Jan -
I like how you attempt to twist his words
@Return_of_the_jedi
and yet fail to do so.
I understand that Nokia choosing WP7 over lesser OS was not what you wanted, it is still something you have to learn to live with.
What is it you do not like about Nokia? Going Android would have been suicide, yet you wanted them to choose that.
Could it be that the predicted decline of Android is that upsetting that you need as many manufacturers using it to help slow the decline?
I'm just curious.
John Zern26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
Most companies report a loss during a transitional phase. I expect Nokia to fully recover in 2012 with the help of WP7. Even the analysts are predicting that WP7 will be #2 by 2015.
Loverock Davidson-26th Jan -
puleezz
@Loverock Davidson-
even the analysts predict? the most clueless bunch out there? and they base their prediction on what exactly? cristal balls? windows phone 7's shrinking market share? down to two percent in the last quarter. and nokia sold one million lumias last quarter? one million in one full quarter? of their new flagship phone? their only hope? that's a desaster in my book.
don't get me wrong, i think windows phone is a nice os and the lumia a good phone. but reality doesn't support you wild claims. to the contrary here is my take: nokia won't survive 2012, just like research in motion.
bannedfromzdnetagainandagain26th Jan -
I agree
@bannedfromzdnetagainandagain
"nokia won't survive 2012, just like research in motion"
Agreed. iPhone will soon have 95%+ marketshare.
It is a sick market. We all lose.
toddybottom_z26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
@toddybottom_z
Based on quality, they could. However, unless Apple decides to enter the prepaid market with ($150+) devices (their current phones are $450+) I don't see it happening. Apple is smarter than MS in realizing there is no point in competing for the low end market. It's far less profitable and invites anti-trust which would restrict their innovation.
anono26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
Nokia threw Symbian under the bus. As a result, many of those loyal to Symbian and Nokia are looking elsewhere (or at least waiting a long time to see what Nokia and Windows Phone can do). Go to Conversations.nokia.com and see what little information is there on Symbian. Windows Phone is the feature there, even though it still isn't ready for Prime Time. Maybe with next release next Fall it will be. As a result, Nokia has no one to blame but itself (technically Stephen Elop).
jkohut26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
@jkohut
Keep telling yourself that it isn't ready for prime time while I enjoy my 7.5 phone.
kris_stapley@...26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
Can't wait until I can get the 900 in Canada on Telus.kris_stapley@...26th Jan -
It's a start
So they've had two WP units for sale in Yurp since October, and they've sold a million units. If we double Yurp sales as a proxy for also being available in the US, they'd have sold 2 million in the 4th calendar quarter if the units had been available in the US and Yurp.
Meanwhile Apple sold 37 million iPhones in 4Q11, and Samsung probably sold more than that.
Nokia has its work cut out.
Robert Hahn26th Jan -
Samsung did not outsell Apple
@Robert Hahn
AT&T says 80% of its phones sold were iPhones.
Android marketshare is crashing. You are right, Nokia has its work cut out for it. So does Samsung. Samsung and Nokia will be out of the smartphone market in 2 years. 4 years max. Then we'll be left with iPhone having 95%+ marketshare. Just like the iPad.toddybottom_z26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
@toddybottom_z
Steve Ballmer is that you? Surely no one else could be dumb enough believe the iPad has 95% market share or that the iphone will have 95% market share without bringing their lowest handset price below $450.anono26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
Without a Verizon phone they are going to miss a sizable part of the American market where Verizon has the only reliable service.
hayneiii@...26th Jan -
RE: Nokia reports big loss despite strong Windows Phone sales
Nokia has been running around like a chook without it???s head. What was it: Symbian, Maemo, MeeGo, Symbian again, then Symbian Anna, Symbian Belle, now Win 7. Many Nokia users have been burnt with the erratic change and not knowing what to expect next, I used to be a Nokia user for over 6 years, I have left them for good and will never go back.
bluering731st Feb
Talkback - Tell Us What You Think
The best of ZDNet, delivered
ZDNet Newsletters
Get the best of ZDNet delivered straight to your inbox
Vendor Showcase
Facebook Activity
