Mixed picture for Nokia, as 2012 presents challenges - Mobile World Live

Mixed picture for Nokia, as 2012 presents challenges

26 JAN 2012

Nokia said it has “sold well over 1 million Lumia [Windows Phone] devices to date,” although the introduction of this new smartphone line has been accompanied by a warning that the company will now sell “fewer Symbian devices than we previously anticipated.” The performance of its mass-market Mobile Phones unit in the fourth quarter of 2011 was described as “solid.”

In a statement, Stephen Elop, Nokia’s CEO, warned that it is “currently not appropriate” to provide annual targets for 2012, which will “continue to be a year of transition.” In addition to competitive and portfolio-related pressure in the devices business, Nokia Siemens Networks is also undertaking a broad-ranging restructure programme. The company also noted troubles in the macroeconomic environment.

For the quarter, Nokia reported a loss of EUR1.1 billion, compared with a prior-year profit of EUR745 million, on revenue of EUR10 billion, down from EUR12.7 billion. Excluding a EUR1.1 billion impairment charge related to the creation of its Location & Commerce business, it would have been around breakeven.

Elop said that the first Windows Phone devices are intended to “establish a beachhead in the war of ecosystems, and country-by-country that is what we are now accomplishing.” With launches in markets including Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan having taken place, the company is now moving into markets including the US, Latin America and China.

While Nokia’s performance with Windows Phone is solid, by far the bulk of its smartphone sales still come from the legacy Symbian platform, which the company said in February 2011 would power some 150 million more devices. Elop now said that “as a result of changing market conditions, combined with our increased focus on Lumia, we now believe that we will sell fewer Symbian devices than we previously anticipated.

Elop said the company is “pleased” with the performance of its Mobile Phones unit, with a double-digit percentage growth in its dual-SIM business, with particular strength in India, the Middle East, Africa and South East Asia. Yesterday, the company said that 1.5 billion devices powered by its Series 40 platform have shipped cumulatively.

On an operating level, Nokia saw a profit of EUR203 million from Devices & Services, compared with a prior-year profit of EUR1.1 billion, on revenue of EUR6 billion, down from EUR8.5 billion. NSN saw an operating profit of EUR67 million, compared to EUR1 million in the prior-year, on sales of EUR3.8 billion, down from EUR4 billion.

In the fourth quarter of 2011, Nokia shipped 113.5 million devices, down 8 percent year-on-year, but up 6 percent from the earlier sequential quarter.

Q4 smartphone shipments were 19.6 million units, down 31 percent year-on-year, but up 17 percent on the prior quarter.

Shipments of mass market mobile phones in the three months reached 93.9 million, down 1 percent year-on-year, and up 5 percent sequentially.

In the fourth quarter of 2011, Nokia also established its Location & Commerce unit, to “drive value from our leading mapping and location-based services platform.” It recorded a goodwill impairment of EUR1.1 billion as a result of a revaluation of this business.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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