Nokia Selling Millions of Windows Phones Now but Lowers Q1 Outlook

Smartphone maker Nokia announced Wednesday that it sold more than 2 million Windows Phone handsets in the previous quarter, up from the 1 million or more it sold in the previous quarter. But the company warned that its financial outlook for the quarter would come in lower than expected.

First, the good news. Nokia has now sold between 3 and 4 million Windows Phone-based Lumia handsets worldwide since launching its first product in November 2011. And its new flagship device, the Lumia 900, launched this week to stellar sales on AT&T in the United States.

Nokia’s device sales margins remain unchanged at 25 percent, while the average selling price of its Windows Phone handsets through the end of Q1 was $288.

“Nokia has seen sequential growth in Lumia device activations every month since starting sales of Lumia devices in November 2011,” the company noted in a press release describing the first quarter. “Lumia has gained market share with both distribution partners and consumers. The Windows Phone ecosystem is also attracting developers and has expanded rapidly with more than 80,000 applications available.”

That said, Nokia is lowering its outlook for the first quarter thanks to a faster-than-expected sales decline in its previous smartphone line, which is based on the aging Symbian OS, the ongoing transition to Windows Phone, and other factors. Nokia sold 12 million smartphones overall in the first quarter and an additional 71 million mobile phones.

"We have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success,” Nokia CEO Stephen Elop said. “Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States.”

Nokia now offers four models of Windows Phone handsets—including the Lumia 610, 710, 800, and 900—and it recently revealed a fifth, a version of the Lumia 610 that will sport NFC (near field communications) capability when it arrives in Europe in July. Nokia is also expected to be at the vanguard of the Windows Phone 8 wave that kicks off in October. By that time, Canalys estimates, Windows Phone will control 6 percent of the smartphone market, up from about 1.3 percent last year, with the primary driver being Nokia’s Lumia lineup.

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