Nokia Posts $1 Billion Loss but Lumia Sales Strong

Beleaguered smartphone vendor Nokia posted fairly horrific quarterly results, with a loss of $1.9 billion on revenues of $9.2 billion. But there were some bright signs: Nokia’s quarter-over-quarter Lumia sales were up 200 percent, and the company ended the quarter with significantly more cash ($5.2 billion) than expected.

"Nokia is taking action to manage this transition period,” Nokia CEO Stephen Elop said. “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.”

Nokia is transitioning from its legacy product lines to a new family of Lumia smartphones based on Microsoft’s Windows Phone. This effort has progressed slowly, but Lumia sales have risen quarter over quarter, and in Q2 2012, Nokia sold more than 4 million Lumia devices. That’s double the number from the previous quarter.

Nokia also addressed some tech blogger- and press-induced drama in which the company was allegedly surprised by the fact that Microsoft’s next Windows Phone version, Windows Phone 8, wouldn't run on existing devices, including the flagship Lumia 900, which experienced strong sales in Q2 in all regions, and “stronger than expected” sales in the United States. But as Microsoft’s premier Windows Phone partner, the company was obviously involved in that decision-making process. Contrary to lurid reports online, Elop says Nokia plans to continue updating its existing Windows Phone 7.x-based Lumias with new capabilities over time.

“We shipped 4 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,” he said. “We believe the Windows Phone 8 launch will be an important catalyst for Lumia.”

And Lumia sales are indeed rising quickly. Nokia sold 1 million Lumias in Q4 2011, 2 million in Q1 2012, and then 4 million in Q2 2012, a doubling of sales for three quarters straight. This quarter’s Lumia sales were much higher than analysts expected, and with a well-timed price drop on the flagship Lumia 900, Nokia hopes to see the strong sales continue through the launch of Windows Phone 8.

Of course, these numbers are dwarfed by the market leader, Samsung, which sold 50 million smartphones in the most recent quarter. Even number-two Apple likely sold an expected 30 million units of the iPhone 4S, which lacks features commonly found on Android and Windows Phone handsets, such as LTE compatibility. (Apple announces its quarterly results soon.)

TAGS: Windows 8
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