Print 39 comment(s) - last by datdamonfoo.. on Jan 14 at 12:43 PM

  (Source: Nokia)
Signs of recovery raise hope among investors

From large layoffs to mortgaging its headquarters, Finnish phonemaker Nokia Oyj. (HEX:NOK1V) is clearly has been in trouble in the consumer market, and the company appears well aware of that.  Seeing the writing on the wall of its aging Symbian operating system, Nokia made a bold move adopting Microsoft Corp.'s (MSFT) Windows Phone operating system, becoming the first major OEM to throw its weight squarely behind the new platform.

And while the transition has been painful, it is finally showing signs of paying off with Nokia announcing the sale of 4.4 million Lumia (Windows Phone) handsets in Q4 2012. Sales were boosted by high end handsets like the slick Lumia 920 Windows Phone 8 handset, and by expanding its reach to three of America's top four carriers.

At last the Symbian phaseout is almost complete.  Only 2.2 million Symbian handsets were sold in the quarter.  The rest of smartphone sales (9.6 million units) consisted of Asha full touch phones.  Asha is a popular low-cost option in developing markets and uses its own proprietary bare-bones operating smartphone operating system.

Nokia Lumia 920

While smartphone sales are down almost 20 percent from the 19.6 million units Nokia moved last year, the drop off was less severe than analysts were expecting.  And the fact that roughly two-thirds of Nokia high-end smartphones are now Windows Phone indicates that the transition is almost finished.

As a result of the cost cutting coupled with stronger sales, Nokia says it has achieved underlying profitability again.  That's a huge development for the OEM who endured several painful quarters of large losses.  Nokia estimates it pocketed €30M ($39.8M USD) in non-recurring IPR income on total sales of €3.9B ($5.2B USD).

Overall Nokia sales of all mobile devices fell to 79.6 million units -- from a volume of 113 million units last year.  Nokia recently lost its global lead in handset (including non-smartphone sales) to South Korea's Samsung Electronics Comp., Ltd. (KSC:005930).

Overall mobile phones brought in €2.5B, smatphone sales were €1.2B, and services sales (which include patent settlements with Apple, Inc. (AAPL) and others) pulled in €0.2B.

Nokia stock jumped up over 20 percent in early trading on the hopeful news.

Gartner, Inc. (IT), a top mobile research firm, has estimated that by 2015 that Windows Phone will be the #2 smartphone platform in the world, bumping Apple and its increasingly-dated Palm-style user interface to third place.

Sources: Nokia [Q4 2012], [Q4 2011]

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RE: That's good news
By Tony Swash on 1/10/2013 10:00:32 PM , Rating: -1
Is not just a question of the number of Windows Phones that are sold it is also the question of business model. Microsoft currently can only make money from phones via software lisences (app stores all seem to be basically break even operations). On devices that sell for as little as modern smart phones there is a limit on what can be charged to OEMs for a device lisence, a low limit. Even if tens of millions of Windows Phones are sold Microsoft will still make peanuts. In the new mobile device consumer markets the OS software lisence business is dead, it will never make anything other than tiny amounts of revenues and profits. So Microsoft is faced with two huge mountains to climb, to sell it's OS by breaking late into a market already dominated by giant incumbents whilst also being faced with the redundancy of it's business model (OS software lisences) and the need to find an entirely new business model. Both the incumbents, Apple and Android, give their OS away for free. How can Microsoft compete by tryingto sell an OS?

RE: That's good news
By StevoLincolnite on 1/10/2013 10:06:27 PM , Rating: 2
Apple doesn't give their OS away for free.

And instead of hating the competition all the time Tony, hows about singing a little praise? Without competition Apple, Microsoft, Google will be completely and utterly stagnant.

Companies only innovate when they have to, not just because they can.

RE: That's good news
By Tony Swash on 1/11/13, Rating: 0
RE: That's good news
By JPForums on 1/11/2013 8:57:12 AM , Rating: 2
To be fair, Tony is not really hating the competition. He simply takes a overly pessimistic view of the competition which sometimes causes him to exaggerate their faults and struggles while overlooking their merits and opportunities. If he really hated Microsoft, for instance, he wouldn't be offering advice on how he thinks they can stay in business and remain relevant/profitable.

RE: That's good news
By Cheesew1z69 on 1/11/2013 1:53:46 PM , Rating: 2
Sometimes? Every post..

RE: That's good news
By Tony Swash on 1/11/2013 3:16:42 PM , Rating: 2
Perhaps I should use your comments on Apple as a model of balanced and objective impartiality :)


RE: That's good news
By Cheesew1z69 on 1/11/2013 3:38:50 PM , Rating: 2
Perhaps you should go suck an egg...

RE: That's good news
By retrospooty on 1/11/2013 3:49:48 PM , Rating: 4
"He simply takes a overly pessimistic view of the competition which sometimes causes him to exaggerate their faults and struggles while overlooking their merits and opportunities."

That is a very fair statement. While doing that he takes an overly optimistic view of Apple which sometimes causes him to ignore Apple's faults and struggles while over-hyping their merits and opportunities.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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