Nokia posts $1.5B loss for 2011

Nokia posts $1.5B loss for 2011

Summary: Finnish phonemaker suffers severe losses despite sale of over a million Lumia devices, products which CEO Stephen Elop says will be company's main thrust for coming year.

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Last year proved to be tough one for Nokia which saw losses totaling 1.2 billion euros (US$1.5 billion), despite the Finnish phonemaker clocking sales of over 1 million Lumia devices. CEO Stephen Elop reaffirms efforts to further push the Lumia product range and maintains the company is in the "heart of transition" to recovery.

In a statement Thursday, Nokia posted heavy losses in fourth-quarter 2011 as well as the full year during which it lost 1.2 billion euros (US$1.5 billion), compared to a profit of 1.8 billion euros (US$2.3 billion) in 2010.

In its fourth quarter, ended Dec. 31, 2011, the company saw losses amounting to 1.07 billion euros (US$1.4 billion), compared to profits totaling 745 million euro (US$976 million) in the previous year.

Still, Nokia said it had a solid fourth-quarter performance in mobile phones and would be accelerating investment in its Lumia range of smartphones. It revealed that "well over 1 million Lumia devices" have been sold to date.

The fourth quarter marked a "significant step in Nokia's transformation", Elop said in the statement. "Overall, we are pleased with the performance of our mobile phones business, which benefited in fourth quarter from sequential double-digit percentage growth in our dual SIM business, with particular strength in India, Middle East and Africa and Southeast Asia."

He also pointed to the Lumia 800 and Lumia 710 smartphones--the company's first two Windows Phone 7 devices launched from its partnership with Microsoft--and highlighted Nokia's "important re-entry into the North American market" with the Lumia 900, its first LTE-capable phone.

The company revealed that in the fourth quarter of 2011, it received from Microsoft its first quarterly platform support payment of US$250 million as part of the deal inked in February last year.

Nokia's latest financial results comes as the once-dominant mobile giant continues its ongoing struggle to curb its losses and declining market share in the face of intensive competition from key rivals Apple and Google.

Elop acknowledged the presence of its competitors. "In the war of ecosystems, clearly there are some strong contenders already on the field," he said, noting Nokia's intention to continue pushing its Lumia phones.

"Our specific intent has been to establish a beachhead in this war of ecosystems... From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful.

"We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012," Elop said. "While we progressed in the right direction in 2011, we still have a tremendous amount to accomplish in 2012, and thus, it is my assessment that we are in the heart of our transition."

Nokia's losses starkly compares to a stellar financial performance from Apple which this week reported record revenues of US$46.3 billion, driven by robust sales of its iPhone and iPad products. In a previous ZDNet Asia report, industry analysts noted challenges Nokia faced in pushing its Windows Phone products with many customers already attached to the Google Android and Apple iOS platforms.

Topics: IT Employment, Hardware, Mobility, Networking, Smartphones, Software

Jamie Yap

About Jamie Yap

Jamie writes about technology, business and the most obvious intersection of the two that is software. Other variegated topics include--in one form or other--cloud, Web 2.0, apps, data, analytics, mobile, services, and the three Es: enterprises, executives and entrepreneurs. In a previous life, she was a writer covering a different but equally serious business called show business.

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