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The Windows Phone push is finally paying off

Nokia Oyj. (HEX:NOK1V) today reported [PDF] that after six quarters of losses, it is at last once again profitable, as predicted.

The Nokia of today is a different one from that of three or four years ago.  The once sustaining backbone of feature phones is not gone -- Nokia remains a top player in this market -- but it is diminished, as Nokia no longer holds the top spot (that belongs to South Korea's Samsung Electronics Comp., Ltd. (KSC:005930)).  And in the smartphone sector sales have shrunk to 6.6 million units -- nearly a third of what it was a year ago.  And most importantly, the majority of those smartphones carry a third-party operating system, Windows Phone, which replaced the proprietary Symbian operating system that once drove Nokia's lineup.

The Windows Phone transition is nearing completion -- in Q4 2012 Nokia sold 4.4 million Lumia Windows Phones, while moving only 2.2 million Symbian phones.

Nokia overall posted a profit of €0.05/share ($0.07 USD/share) before tax, or about €202M ($269.0M USD) in total profit after tax.  That's a huge difference from the €1.07B ($1.43B USD) that Nokia lost in Q4 2011.  But revenue was also down, at €8.04B ($10.73B USD), slightly below the analyst expectation of €8.12B ($10.83B USD), and down from €10.01B ($13.36B USD).
 

Nokia Lumia 920
 
Nokia's sales of phones were down in almost every region, with the major exception of North America, which saw an incredible 270 percent year-to-year growth.

The new Nokia is much leaner than it once was following a series of layoffs and the leasing of its gleaming Finnish headquarters.  The company made a major shift, announcing that it would be cutting its dividend for the first time since 1989.  While that move may irritate investors, it should boost a now-profitable Nokia's cash-pile, which has dwindled amid the losses.  Last year, despite the losses, Nokia still paid investors a dividend.

CEO Stephen Elop, a former Microsoft Corp. (MSFT) executive acknowledged that Nokia is still "moving through [a] transition," but enthuses, "We are very encouraged that our team’s execution against our business strategy has started to translate into financial results. Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012."

The Nokia recovery is perhaps a hopeful sign for other struggling players like HTC Corp. (TPE:2498) and Research in Motion, Ltd. (TSE:RIM).  But it should by no means be considered the norm; the recovery has come at a tremendous cost as the company has labored to reinvent itself as a smaller, more agile competitor.

One distinct advantage Nokia has over other struggling players its Nokia Siemens Networks joint venture, which sells telecommunications equipment.  The NSN unit has continued to grow in revenue, even as the mobile devices unit has shrunk in revenue.  While smartphones and mobile in general do seem to be turning the corner from a operating cost perspective for Nokia, the profitability was only achieved thanks to a strong performance from NSN.

Source: Nokia [PDF]



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RE: Only 4.4M handsets sold?
By BabelHuber on 1/25/2013 10:59:53 AM , Rating: 2
Nokia burnt Billions of Dollars in 2012 - Q4 is the first quarter where they were a little bit profitable.

And in which parrallel universe is WP gaining traction? Is a market share in the low single digits 'gaining'? For a company like MS?

In 2013 competition will be even tougher: Tizen or Sailfish could very well overtake WP.

So let's see...


RE: Only 4.4M handsets sold?
By Mitch101 on 1/25/2013 1:21:07 PM , Rating: 2
Open up forbes or motley fool once in a while.

Nokia’s Move - Fire On All Cylinders
http://beta.fool.com/jyotiadvisor/2013/01/25/nokia...

CHART OF THE DAY: Apple's Days Of Mega-Growth Are Over
Read more: http://www.businessinsider.com/chart-of-the-day-ap...

Microsoft: Windows Phone Related Revenue Increased $546 Million

Windows Phone breaks 5% market share in Europe, making strong gains in UK and Italy

Huawei has long-term plans for Windows Phone says CEO

Growth is growth even if its slow as long as it makes profits then its not going away.

I should remind people when Android wins so does Microsoft.


"Mac OS X is like living in a farmhouse in the country with no locks, and Windows is living in a house with bars on the windows in the bad part of town." -- Charlie Miller














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