Nokia on Thursday morning posted its earnings from Q2 2012 and, as expected, things are looking a little bleak for the Finnish-based company.
Nokia on Thursday morning posted its earnings from Q2 2012 and, as expected, things are looking a little bleak for the Finnish-based company.
Overall, Nokia reported a net loss of $1.74 billion as smartphone sales plummeted 39% all the way down to 10.2 million units. Nokia’s sales volume with respect to feature phones rose 4% year over year with the company moving about 73 million units over the last 3 months.
Sales revenue, however, did rise a respectable 45% in North America as the company also reported sales of 4 million Nokia Lumias during the quarter, more than what analysts were anticipating. But perhaps speaking to the uphill battle Nokia faces in the US, only 600,000 of those Lumia phones were sold in the US.
When the dust settled, EPS came in at -$0.09 a share.
Nokia CEO, and former Microsoft executive, Stephen Elop had this to say about the company’s quarterly performance.
Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.
We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices.
But here’s the thing. The market is moving away from feature phones so Nokia’s ability to stay consistent in that market is, to a large extent, irrelevant. The real indicator of Nokia’s success is smartphone sales, and again, those sales were down 39% this past quarter.
And speaking of Windows Phone 8, Elop was asked during Nokia’s earnings conference call if the first Windows Phone 8 device to ship would be on Nokia hardware. Elop naturally didn’t answer the question directly, though he did sort of tip his hand in stating, “One signal [of what is coming] is that on the number of occasions when Windows Phone 8 has been demonstrated it has been on a Nokia device. We have a close relationship that is unlike what anyone else has with Microsoft.”
Microsoft and Nokia are both relying on each other to make a dent in the smartphone market, but with Apple and Android already owning the lions share of all smartphone sales, their efforts may very well prove to be too little too late.
