Nokia have generated an operating loss of £98.8 mllion in the second quarter and revenues have fallen 24% as they have struggled to turn their handset business around. It isn’t all bad news for the company however as their Lumia smartphones have outsold rival Blackberry. This is seen as very important for the company, especially in an industry dominated by Apple and Google Android.
Nokia are struggling however because they have made operating losses totalling €4.1bn in the past nine quarters. Only Nokia Siemens Networks, their joint venture for the mobile infrastructure business has generated an operating profit of €8m on revenues of €2.78bn. Nokia have since taken control of the business after the quarter ended buying the other 50% for €1.7bn.
The Guardian added “The handset business lost €33m on revenues of €2.72bn, down 32% from a year ago and down 6% sequentially. A key problem was China, where the volume of sales fell by 48% as buyers there shift to smartphones – often running versions of the Android software – made by indigenous companies. Nokia’s handset revenues are now smaller than at any time since 2002.”
CEO Stephen Elop said “Our mobile phones business unit started to demonstrate signs of recovery in the latter part of the second quarter following a difficult start to the year.” Adding it would “take actions to focus its product offering and improve product competitiveness.”
Nokia have sold 7.4 Lumia smartphones and they are selling comparable volumes to the second tier Android OEM’s such as HTC, LG and Sony. Blackberry only sold 6.8 million handsets in the quarter to the end of May.
Francisco Jeronimo says “Nokia continues to show no signs of recovery in the US market.” Adding “High investments, high expectations, low results.”
Elop took over the company in September 2010 and didn’t opt for Android, concerned that their market would be dominated by a single partner, which has happened, in the shape of Samsung. He decided to go with Windows Phone software saying in January 2011 that the smartphone business was “not a battle of devices, it’s now a war of ecosystems.”
Kitguru says: The first time that the Lumia range has outsold Blackberry handsets.