Nokia mobile phone sales plunge 30% as Microsoft takes full control

Nokia mobile phone sales plunge 30% as Microsoft takes full controlNokia is now fully absorbed into the Microsoft empire, but if Redmond was assuming taking full control of the formerly Finnish operation would see it jumping aboard the fast train to mobile hardware success, it better think again.

That's because Nokia's latest quarterly financials have been announced, and show a massive 30% drop in mobile phone sales compared to a year ago.

Overall, Nokia posted a net loss of €239m from January to March, and as we've seen time and again over the past couple of years, the losses come directly from Nokia's devices and services division – the bit now owned by Microsoft.

In fact, that number would be bigger if it weren't for the rest of Nokia's business, and specifically the patent licensing sector. Nokia may be facing a radically different future having got rid of the hardware division that made it famous, but on paper at least it's held on to the parts of the company that are actually making money.

As for an explanation for the latest round of losses, Nokia says in its earnings report: “On both a year-on-year and sequential basis, our mobile phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio.”

Or to put it in plain English, “at every level our rivals are still coming up with better, cheaper products than ours”. Cruel it may be to put things in such blunt terms, but it's hardly like any of this is either new or surprising.

As for what happens next, it'll be interesting to watch. This was the last set of Nokia earnings figures to include its devices and services division – from now on it'll fall into Microsoft's financial infrastructure.

That alone should take things back from the brink in the sense that Microsoft can sustain continued losses into the future for longer than Nokia would have been able to. It didn't just spend several billion dollars to lose more money down the line, however, and yet it's hard to see a quick fix that will turn things around anytime soon.

Or maybe we're just not putting enough faith in Stephen Elop – former Nokia CEO now (conveniently) reinvented as Executive VP of Microsoft Devices – who has already shared some of his vision for Microsoft's new mobile hardware business going forward.

“The Nokia brand is available to Microsoft to use for its mobile phones products for a period of time, but Nokia as a brand will not be used for long going forward for smartphones,” Elop revealed in a Nokia Conversations AMA this week. “Work is underway to select the go forward smartphone brand.”

There you have it: Nokia, the former name of Microsoft's go forward smartphone brand.

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6 comments

JanSt / MOD  Apr. 30, 2014 at 15:02

Yep... Too expensive at launch, poor resale value. And look, after 3 months you get the same device for half, and a different OS offers better for half anyways.

Not everyone is bowled over by a great camera. Especially if said great camera
comes with a huge disadvantage: massive shutter-lag!

Also: I reckon some who are willing to dip their toes into lake M$ are waiting for WP8.1?
Not....

satchef1  May. 1, 2014 at 00:36

At the smartphone level I'd say the blame lies solely with the poor release schedule. Nokia had a strong line-up and a decent naming scheme with the 920, 820, 720, 620 and 520 (even if the 720 was utterly pointless and the 820 rather uninspiring). They then fell apart a bit, waiting six months to issue a facelift to the 920 (the 925) and releasing the strange Lumia 625. Three niche handsets followed (the 1020, 1520 and 1320), then a rather pointless 525 (a 520 with double the RAM). Then finally, 18 months after release, the 920 actually gets a true successor! They also rolled out the Lumia 630, which (rather bizarrely, considering they decided the 525 was necessary) only has 512MB RAM. The past year has all been a bit of a mess really.

It's the phablets that I really begrudge. Nokia just went a bit loopy. The Note II was a great handset. It was great largely because of the software enhancements that Samsung added to make use of the large screen (that, and the neat S-Pen). Releasing a larger handset with none of these software features and no stylus was a bit silly. Releasing two of them was downright barmy. Surely the development time would have been better spent on the "core" (and thus highly important to the business) 930 and 630? How about throwing a mid-ranger in to that mix too?

Hopefully it won't take 18 months to get the 940 out of the door...

JanSt / MOD  May. 1, 2014 at 09:01

All good points, satchef - as usual.
The 930 in particular puzzles me. Why another slight upgrade to the 920 ? The 1020 has the flagship camera and could really use a processor and RAM boost. But maybe they think the bump makes it a niche device anyways?
It's all a bit "huh"?! Because in terms of build 3 or 4 of last year's Lumia wipe the floor with the entire comprtition, Yes, incl Apple and that magical HTC One.

satchef1  May. 1, 2014 at 18:58

Can't say I agree with you on the 930, but then I never really saw the 1020 as a 920 successor. It seems more like a side project to me. I'm hoping we see a new version of that device this year. If not, I'll probably pick up a 930 or 1020 come upgrade time.

equ7  May. 2, 2014 at 19:56

While almost every app advertised on tv does not have a WP version the platform is going nowhere. I dont dout M$ has the staying power but why wont M$ just relanch with a new os and try again, it is their normal reaction to very disappointing sales that even their massive advertising budget cant lift.

JanSt / MOD  May. 3, 2014 at 08:49

While almost every app advertised on tv does not have a WP version the platform is going nowhere. I dont dout M$ has the staying power but why wont M$ just relanch with a new os and try again, it is their normal reaction to very disappointing sales that even their massive advertising budget cant lift.

"just relaunch"???? You know how long it took Android to really take of?

No NEW platform will get the app support that Android and iOS have. Not possible.
There are currently over 18,000 UNIQUE Android device models. They run numerous versions of Android. Countles combinations of RAM, processor, screen resolution, OS etc... In case you didn't notice: Android app devs are pretty stressed. They aren't just gonna go for yet another OS. Dito iOS - less'fragmentation', but hey... why start yet another OS?

Blackberry didn't even manage to move from BB7 to BB10, and Blackberry made hardware long before MS! HP couldn't do anything useful with the excellent webOS!

There is not much more M$ can do at the moment. methinks. Even Samsung didn't launch Tizen on a phone. Nope. A watch thing! And where's Samsung's Bada?

The new features in WP8.1 may help to attract more users. Or maybe not.
As to the apps you miss - what are they?

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