Nokia is Profitable Again, 4+ Million Windows Phones Sold in Q4
January 10, 2013 4:19 PM
comment(s) - last by
Signs of recovery raise hope among investors
mortgaging its headquarters
, Finnish phonemaker Nokia Oyj. (
) 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 (
) 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
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
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
) to South Korea's Samsung Electronics Comp., Ltd. (
Overall mobile phones brought in €2.5B, smatphone sales were €1.2B, and services sales (which include
with Apple, Inc. (
) pulled in €0.2B.
Nokia stock jumped up over 20 percent in early trading on the hopeful news.
Gartner, Inc. (
), 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.
Nokia [Q4 2012]
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RE: That's good news
1/11/2013 6:00:27 AM
How can my comment be construed as 'hating"? All I am trying to do is point out some of the strategic problems created for Microsoft by the shift from PCs to mobile devices. Does anybody claim that Microsoft has been a success in the mobile space? If I look out of the window and say 'it's raining' does that make me a sunshine hater?
Sales of mobile devices using a Microsoft OS have been tiny but a deeper problem is that even if Microsoft could sell tens of millions of Windows powered devices each quarter they will make a very small fraction of the sort traditional revenue and profit rates that they used to make selling PC OS and Office licences. And while they struggle to come up with a strategy that can both generate volume mobile sales and a decent rate of profit the mobile revolution eats away at their existing business and source of their profits.
I think that all of Microsoft's previous experience has ill prepared them for the current challenges and makes them respond in clumsy and ineffective ways and that will probably continue until there is an entire replacement of their top management. It is additionally unfortunate for them that they have as CEO not only someone almost completely lacking the skills and instincts to deal with the new challenges but also someone with a huge share holding in the company and one of the founders of the company. If Ballmer was just an ordinary CEO they would probably have dumped him a long time ago. The longer they drift in denial the deeper the hole will become.
Even people who love Microsoft are saying the same thing.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
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