Linked by Thom Holwerda on Tue 29th Oct 2013 15:04 UTC
PDAs, Cellphones, Wireless

Nokia has just announced its Q3 2013 financial results, revealing an operating profit of EUR118 million ($162 million) from EUR 5.66 billion ($7.8 billion) revenue. That's up massively year over year, but nonetheless represents another quarter of middling results. The report is the first since Microsoft agreed to purchase Nokia's phone business, and that division - Devices and Services - performed as expected, posting a small loss of EUR 86 million ($118 million).

So, Microsoft is buying the part of Nokia that is losing money, while the parts that make money remain in Finland. Seems like a good deal for Nokia-proper. In the meantime, Microsoft will be saddled with a devices division that is still losing money, and whose increase in sales consists largely of low-end, low-margin devices (like the 520). Interesting - especially since Windows Phone was supposed to prevent Nokia participating in a race to the bottom. I'm sure Microsoft's super-successful Surface division welcomes Nokia's devices division.

The cold truth: even more than 2.5 years after announcing the switch to Windows Phone, Nokia's Lumia range still cannot make up for drop in sales of Symbian devices and feature phones. This is roughly the same timeframe in which Samsung rose to the top. With Android.

Read into that what you will.

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RE[6]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 01:19 UTC in reply to "RE[5]: Comment by Nelson"
Nelson
Member since:
2005-11-29

I'm sorry, have you magically come back with tangible proof that the 520 is a low margin device?

If you have access to the 520 BOM please fill me in because I've been trying to get ahold of it.

Nokia's D&S loss once you exclude one time restructuring and amortized costs is actually fairly low (if an increase from previous Q) but it is by no means burning a hole in anyone's wallet.

I think Nokia has pretty good fixed costs now in D&S judging by their drop off in operational overhead as well with increases due to new product roll outs.

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