Nokia's Lumia 920 supply issues: Demand or cautious rollout?

Nokia's Lumia 920 supply issues: Demand or cautious rollout?

Summary: The big question remains what the Nokia Lumia 920 would have done if there weren't supply issues.

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Nokia CEO Stephen Elop said Thursday that he was pleased with demand for the company's flagship Lumia 920 device, but also acknowledged that management was cognizant of oversupply risks.

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Elop's comments came on a conference call following Nokia's upside surprise. Nokia said its fourth quarter would be better than expected and the company sold 4.4 million Lumia devices. Nokia executives didn't break out sales of Windows Phone 7 and Windows Phone 8 devices.

Earlier: Nokia Q4: Better than expected, Lumia sales 'solid'

Speaking about Nokia Lumia 920 supplies, Elop noted that the company is "still dealing with constraints." Elop added that he expects Symbian device sales of 2.2 million in the fourth quarter to fall off dramatically going into the first and second quarters.

The big question here remains what the Lumia 920 would have done if there weren't supply issues. Nokia was "very deliberate" and "thoughtful" about early momentum for Lumia devices. Translation: Nokia didn't want to be embarrassed about too much supply.

Elop said that the supply issues weren't totally strong demand. He noted that there were component shortages and Nokia is "working with suppliers and operators to work through the situation today."

Analysts asked about Lumia volume going forward, but Nokia didn't offer projections. Nokia is launching Lumia 920 in India and China so volumes could pick up. For Windows Phone watchers, Elop said the ecosystem was healthy and carriers were interested in developing a No. 3 platform. Nokia's aim is to get Windows Phone market share to 10 percent.

Add it up and Nokia's fourth quarter could be viewed as a positive sign for Windows Phone demand. However, it is worth noting that Verizon and AT&T combined sold roughly 20 million smartphones in the fourth quarter mostly fueled by Apple's iPhone 5. Nokia didn't break out Lumia demand in North America, but the numbers indicate that Windows Phone is a small player compared to iPhone and Android devices.

By the numbers:

  • Nokia said fourth quarter operating margin will be at least break even to 2 percent. 
  • Device and services sales will be EUR 3.9 billion with 83.6 million units shipping. 
  • Nokia moved 9.3 million Asha units, 6.6 million smartphones with 4.4 million Lumia units and 2.2 million Symbian. 
  • Total Nokia sales for the fourth quarter will be EUR 4 billion.

Topics: Mobility, Nokia, Smartphones

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  • Is this Larry showing he doesn't understand business, yet again?

    "Translation: Nokia didn't want to be embarrassed about too much supply."

    Correct Translation: Nokia did not want to be sitting on costly excess inventory, purchased but unable to be used.

    On one day he points out that Nokia needs to be careful with their money, then the next says that there's nothing wrong with spending millions on components that may never be used.
    That's usually a sign of someone who doesn't understand business.
    William Farrel
    • Who doesn't understand?

      Larry's comment and your comment are equal. What a stupid comment you made.
      Narg
      • Not really. I know my argument is most likely dead on accurate,

        while Larry's isn't. I've seen many aspects of the companies I worked for over the years, and the smart ones don't go out and buy an over abundunce of excess inevetory in the "hope" they'll be able to use it. It just ties up too much cash needlessly, and may leave you with parts you can't use as consumers have moved on to your next model, which is a waste of cash.

        The whole concept of JIT was developed for fast changing product orders, and something tells me that smartphones fit that description. Smart business doesn't base it's inventory purchases off of embarrasment, they base it off of how to best maximize profit.

        To claim it was only done because it'll be embarrasing if they have all this excess ineventory tells me he doesn't understand how big business runs, or was just a shillin'.
        William Farrel
  • Third player always weak

    I think if you look at almost any consumer market you have only a couple of really strong players and the rest are taking up the slack. Which is usually not much. Now these two players may change over time but in the end you still have two players. Right now those two are Apple's iPhone and Android. The problem with Windows phones is two fold. One they came out with decent phones far too late to fight for those two spots. Second they have yet to offer anything that would potentially dethrone one of those two key players. Its not that Windows phone's are bad. They just had so many obsticles to over come in the market. I think Microsoft will have to be satisfied just being a small player.
    jscott418-22447200638980614791982928182376
    • Only if

      Your argument would be right only if Microsoft is just a small player all throughout their market and not just mobile devices. They are big in enterprises and in the pc market. They could use this as a leverage to extend and use as a stepping stone to take over mobile.

      Since businesses would most likely adopt Windows Phone since they're already attached to the Windows ecosystem and Windows Phone 8 is built in the NT kernel and alongside PC users, Microsoft could potentially create a seamless integration across all platforms.
      imscythe
      • Sorry no

        Most businesses are not likely to adopt Windows phones. With the exit of RIM's Blackberry, many companies are moving to iPhone and/or Android. We tested Windows phone in out environment and it wouldn't even work with our EAS policy because it won't encrypt the SD Card. There really is NO integration between Windows phone and Windows itself or the Microsoft Enterprise network. The only potential advantage to having a Windows phone on a Windows Enterprise network is that the O/S's are both made by Microsoft. To me, that's not much of an advantage at all.
        MrSmith317
        • It's all about using the same kernel

          The integration may not be clear right now since it is the first iteration of WP8 but when WP8 grows it will happen. This will position WP8 as not fragmented as that of Android and the limitations of iOS when use in an enterprise or all Windows ecosystem.
          imscythe
        • How do you know that most business don't want Windows Phones?

          Most business would adopt most secured, "in their eyes", within their domain. I think Microsoft gives the business more control on their devices with Intune and BB with its BES. And most business phones are used for messaging including emailing not apps. Having said that SD Cards are not encrypted with Androids also and iPhone anyway doesn't support SD Cards. Nokia Lumia 920s doesn't support SD Cards either.
          Ram U
          • Theres a option on android

            Under security that allows you to encrypt sd cards.
            Anthony E
        • Strange...

          Sure, you can't encrypt SD cards on WP8, but at the same you the end-user may only save pictures, video and music. Typical business documents (e.g. PDFs) cannot be saved on the SD card, and changing extensions isn't going to fool the system, it reads based on header. Not only that, but the top WP8 handsets - i.e. Lumia 920 and HTC 8X - don't even have SD card slots. Either your company was testing a Lumia 810/822/820 or 620, or HTC 8S, the latter unavailable in the U.S.
          saqrkh
        • Ummm...

          QUOTE: "it wouldn't even work with our EAS policy because it won't encrypt the SD Card". Two things. Firstly, if you're talking SD as in card, instead of internal storage, then what phone were you using? None of the WP* devices I've seen have SD cards. Secondly, if you meant the internal storage, I assume then that the internal storage encryption option in the Settings wasn't good enough for you?

          My 920 appears to do everything that I need it to right now. And Microsoft are building Mobile Device Management options for business, possibly into SC2012 and others - which wil lallow all manner of control via policies, OTA updates, etc., including sideloading business apps OTA.

          So... what doesn't work again?
          NKX
    • Microsoft 3rd

      I'm not sure they will be 3rd for much longer.
      Remember that iphone is mostly a fad inside the USA.
      Yes, I know you'll claim other countries and China.. but their sales are dismal overseas (in %s). If you do poor in China and get .3% of the population you're sellings millions.

      Microsoft is the only competitor that is gearing their OS and services to be used and synched across all devices (phone, tablet, laptop, desktop). They still have the business and consumer market across the world by 90% at least.
      JABBER_WOLF
  • Poor Strategy

    1) Not available on Verizon

    2) No expandable memory

    If they fixed these two issues, I'd contemplate the 920.
    theSaj
    • Lumia 822....

      I am very happy with my Lumia 822 on Verizon. The expandable memory is great. I have a 64 GB micro-SD card in my phone, on top of the 16 GB internal memory. I have a couple of dozen movies and tons of music on my phone and I still have 10-15 GB free to take photos and video not worrying about running out of space.
      toph36
      • lumia 822 too

        i have the lumia 822 too. I just bought the JBL speaker and the wireless charging case. Thus far, i think the phone is excellent.

        Nokia Music, a free music streaming service that lets you create your own playlists and then download that music to the device for offline listening.

        It has a mobile version of Outlook.
        It integrates nicely with Skydrive, auto-syncing the photos from the phone to the cloud.

        I was also able to add my sdcard from my old android phone to my windows phone.

        I really can't wait for the Lumia 920 varient to come to Verizon.
        RobbieGoD316
    • Easy to fix.

      There are other carriers, and other Nokia models. Done.
      Narg
    • Whoa there...

      1) Not being on Verizon is a Verizon issue. Not Microsoft's or Nokia's. It's available on Vodafone, Virgin, Optus, Telstra, and carrier-unlocked here in Australia.

      2) It's got an internal 32GB storage, with over 26GB free... and links to my 25GB Skydrive (and other cloud storage options). Exactly how much space do you want on a phone? From my understanding of the stats, the best selling phone is the iPhone, and the best selling model of the iPhone is the black 16GB version - which also doesn't have the ability to add storage.

      I sold my iPhone 4S, and then walked into Allphones and purchased an carrier-modification-free, unlocked, outright Lumia 920 (in red). It's awesome.
      NKX
  • WP8 is growing faster than every other platform out there

    Kudos to Microsoft and Nokia.
    toddbottom3
    • YOU'RE RIGHT TODDY...

      The inventory shelves of the carriers foolish enough to carry that brick are growing 10-times faster than both Android and iPhone.

      Just like Windows 8 boxes and laptops, Surface RT devices, and a billion Win 8 convertible thing-a-ma-jigs, they are rotting on store shelves.

      Nokia is learning to fudge the numbers, as they learned from the best.

      At the end of the day, Microsoft and Nokia can misrepresent all the data they want, because after all... they're only lying to themselves!
      orandy
      • Can you explain the carrier's thought process?

        If the carriers have a ton of these phones available, why are many of them refusing to sell them to customers who want to buy them? Why are those carriers telling paying customers that they are sold out?

        I look forward to you expanding on why exactly carriers are refusing to sell product that they have sitting on inventory shelves.

        Thanks.
        toddbottom3