The decline continues for Nokia. While Lumia sales volume increased by 32% to 7.2 million during Q2, this was well short of the 8.1 million analysts expected would be sold. Meanwhile, smartphone sales are down 10.2 million units from Q2 2012, based solely on the death of Symbian. Did Nokia jump from a burning platform to a sinking ship? Or will the next Windows Phone update finally bring feature parity with Symbian? Note from Thom: Loads of new models, yet still not the turning point we are promised every time Nokia releases quarterly figures. I’m sure the next quarter, with the next new flagship, will turn it all around.
Nokia said Lumia sales would increase 27%, Wall St. said it would increase 50%. Know one knows where they got 50% from…
Thom will never credit Nokia for anything, ever. Where is cdude with his dumbass channel stuffing allegations? Or profit warning bullshit? Right, there’s something called reality.
At this point its becoming a little hard to deny that Nokia has traction with the Lumia range.
… something about people living in glass houses, throwing rocks, etc, etc.
I’m not the one with the soapbox here, nor do I refrain from criticizing Nokia if that’s what you’re implying. I actually go on at length about where I think they’ve misstepped.
Apparently I just commit the sin of not thinking their Windows Phone choice was a bad idea.
For example, in previous threads I was mocked for saying that exactly what happened today would happen. Nokia had a modest increase of volumes in Q2 for the Lumia line.
Nokia loses $151 million in Q2 2013
http://www.theverge.com/2013/7/18/4534124/nokia-q2-2013-financial-r…
Do you mean that type of “traction” that allows one to slide less quickly down the slope to oblivion?
Read my other comments on this thread. Then come back. I’m not really into repeating myself.
Edited 2013-07-19 11:00 UTC
Actually, this wasn’t really fair. Now that I have more time I’ll be glad to unpack the 115 million euro loss they had, and why non-IFRS numbers are also important.
Nokia did lose 115 million euros last quarter. That’s bad. From where though?
157 million euros came from the restructuring NSN, which as you (hopefully) know, is a very healthy part of Nokia. They previously owned 50% of that venture but they now own 100% of it. Meaning they reap 100% of the upside moving forward. This is good.
151 million euros came from NSN divestments which moving forward will increase NSNs financial health by focusing on what parts of it work and what parts of it don’t.
100 million euros came from old acquisition costs that were spread across multiple quarters on paper.
10 million came from restructuring HERE
That’s a total of 418 million.
-115 – 418 is 303 million euros. So excluding one time charges and asset amortization, Nokia actually posted a strong underlying profit. That is a good sign.
It signals a company in the middle of restructuring and cost controlling, but with incredible upside potential.
That is 2y of NO PROFITABILITY in devices division.
With burning Symbian, Nokia NEVER reported losses in devices division.
Tell me again that you see here “underlying” profits..
(Ofc. you may refere to NSN division, and then yes. Nokia work on transforming it into profitable business is succeeding. But it was not main Nokia business, and till “burning memo” Nokia needed not to worry about such problems in devices division..)
I just fucking broke it down. Can you read?
“Profit warning bullshit”
158mln euro of LOSS is not fulfillment of such warning?
Or 14% of loss per EACH Lumia sold?
Get the facts straight first.
Increase in Lumia sales is only good thing in Q2 report. (And before you call it “good enough” go check how much WHOLE industry grew in same period)
It’s basic math; the analysts calculate the baseline amount of product/income growth Nokia needed in order to operate at a profit, and thus set that as the expectation to judge their performance accordingly. Investors like to invest in public corporations that are profitable, oddly enough.
Nokia has suffered one of the most (if not the most) catastrophic collapses in market share in the mobile market. Therefore these sort of aggressive growth expectations should not come as a surprise.
They also have had a dramatic reversal in losses, given this time last year they lost a billion dollars. So there is significant progress on that front.
Plus they made a pretty nice non-IFRS profit for the fourth consecutive quarter. They’re getting there.
What profit? Nokia still operated at a net loss of over 220 million Euros overall for this quarter. Which was actually better than the 250 million analysts were predicting. But it is still a loss, and that has been the trend for 80% of the last 10 quarters. So as usual, it depends on the point of view.
I’m sure the Nokia’s directorship will see it as a positive that they managed to achieve smaller losses than predicted, so in a sense they did beat analysts expectations. And that could be viewed as being somewhat “good.” But then there is the pesky issue that their revenues also took a dip. Which is objectively “not good.”
But in any case, you already vested yourself on a positive narrative for Nokia’s results during the previous threads about this company. So lo and behold! Of course you found a positive. As I said, it’s all in the perspective; some people see 5 billion Euros lost in a bit over 2 years as a sign of doom and gloom, where others see a clear sign of recovery.
But who knows at this point, the entire industry is taken a beating and going full surrealist it seems.
Well Nokia is a company restructuring, so looking at the company sans one time charges (positive like HQ sales and negative like restructuring) gives a clearer look of the company’s overall health without the quarter to quarter noise.
In addition, on this website a lot of the blame is laid at the feet of one division which never really brought in the lions share of revenue for the company. So there’s also that, Lumia has very little to do with the company’s overall health, and if you look the most major losses came from the mapping division.
My thinking behind assessing the company health is from the perspective of how it will let them execute on their WP strategy. Lumia is irrelevant if they die tomorrow.
That’s why I see a silver lining around underlying profit and reduced losses. The cost control Mr. Elop has put in place are impressive, hate the guy or not. He downsized Nokia and made it a more agile company. The speed of device roll outs is impressive imo.
I do agree with you that your opinion of Nokia varies wildly depending which point of view you approach it from, which is why there are longs and shorts, both with good reason. I just don’t think many of the arguments on these comments, especially the “editorials” (using this term very loosely) here by Thom necessarily measure up.
Edited 2013-07-18 22:54 UTC
Of course they don’t “measure up” since they do not map with your own narrative. In any case, it does not matter what nokia does, you will always go for the positive spin, and others will go for the negative one. So on and so forth…
In a sense, there really needs to be more time to properly assess the current management strategy (but markets don’t favor long term analysis, so that time could be running short). Thus far, Elop and co have spent over 5 billion Euros to basically downsize Nokia. If it takes longer for the company to make that back as profit (if and when they bounce back), then it would mean that the WP strategy was more adept at destroying wealth than creating it. And if viceversa comes to pass, then the WP strategy will be vindicated. Nokia’s bank keeps getting smaller, so they have limited time for this evaluation.
The only relationship I can have with that company is either as a consumer or an investor. The best case scenario for Nokia, under their current paradigm, seems to be that they break even in a few quarters while they also have to reduce margins significantly. So unless they get some explosive growth going, and I personally do no see that happening, they don’t really seem like a very attractive long term investment proposition. As a consumer WP still does not fit my needs even though I kind of like some of Nokia’s latest hardware. This means that I’ve probably wasted more time and effort disusing that company than I should have.
I think that’s an invalid characterization given that I have criticized Nokia before, in fact, in replies to you in a thread prior to this one. I think where the confusion may lie is that I’m more often providing the contrarian view to the echo chamber here. Yet I am vilified for it while the pile on is encouraged and voted up.
I frankly don’t mind it, because often the others have been more wrong than not. You’d think Nokia was having trouble keeping the lights on the way some people talked. When I called for a more measured tone I was voted down and ridiculed. Here we are a year later with great YoY gains, greatly reduced losses, sequential volume gains, and growing mindshare+ecosystem.
Nokia stock took less of a beating today than I thought, I really do think that some investors see the value in Nokia, hence the financing received for part of the NSN acquisition.
The WP strategy was always one facet of the Nokia strategy, its a small arm of the company. Of course it gets the most attention because Microsoft is polarizing but still. I think what it does is set Nokia up as a viable third player, from there Nokia has to claw their way higher. There have been many shifts of power in the mobile industry, Samsung’s dominance is but a few years old and who knows how much longer it will hold, especially given competitive pressures from Asia.
I agree, which is why I obsess over underlying profitability. It shows the potential upside after the restricting smoke clears. 300 million dollars is a lot.
So is NSN being a wholly owned subsidiary. That’s good news.
If you think $300 million lose this quarter is a lot then wait for next quarters when Microsoft platform support payment goes down, license-fees up and those near $2 billion NSN buy-out hit in. Cash-flow problems as junk-rated company ahead.
Edited 2013-07-20 18:58 UTC
At the very most, Nokia lost $15 million this quarter. $100 million was acquisition related costs spread out amongst multiple quarters.
That’s me being charitable and granting that the rest of the ~$192 million iirc of restructuring costs can be arguably taken at face value.
These are charges left over from NAVTEQ and other mapping and NSN related acquisitions.
In other words, you don’t know shit and need to learn how to read financial reports. Thanks for playing, you’re wrong, you’ve been wrong, and will continue to be wrong.
NSN is downsizing rapidly from its more antiquated markets (landlines which are going nowhere) and focusing on the exploding mobile communications market, from which they’ve already gotten sizeable orders. Nokia owning 100% of that is a good thing.
The NSN charge is also 0.5 billion euros with a 1.2 billion loan, and those charges will be felt in Q3, it didn’t appear in Q2, genius.
Edited 2013-07-20 20:40 UTC
Before burining memo Nokia device unit generated:
21.1 Billion US dollars
After:
6.4 Billion US dollars
(annual number for before memo, and for last 4 quaters)
Well, right now device units do show less…
Now for profits:
3.1 Billion US dollars
after memo:
1.6 Billion US dollars
(same periods)
And that 1.6 Bilion US dollars is on NEGATIVE side. Those are loses.
So yes. Nokia DO NEED DESPERATELY to change.
However you DO NOT point at real problem. The burning memo. And I add “The” there because I believe that it will make into marketing&business education books as prime example as to what not to do, and why lies about yours company performance are not good.
So Nokia do need change at CEO. Period. Someone from carriers would be preferable (so that they get the message that Nokia is trying to repair their relationships with them, and will start to listen again). And adoption of Android/Sailfish/Tizen/Ubuntu/FirefoxOS, as another OS offerings. Nokia have good hardware and some ok solutions. They could survive in more crowded “niches”.
Waiting for Lumias to get profitable is not the right choice. Since its already 18th months of NO profit. How many more do you need, to at last say that its failed strategy?
I’m sorry, but you have absolutely no clue what you’re talking about.
Nokia has dramatically reduced its costs, increased Lumia volumes, and positioned itself for financial health. The cost reductions are ongoing through the end of this year, and increased volumes will further help by offsetting fixed costs.
NSN is an extremely bright spot, so are Lumia shipments, especially once they enjoy their inevitable Q3 positive mix.
It’ll be a long haul, but if they maintain volume or slightly increase while moving ASPs upwards and costs downwards, they will be in great shape.
If you look, their margins more or less held steady despite a move to lower priced models, a good sign.
I always wondered why Samsung was the only manufacturer that realizes that Apples focus on one high end handset is part of the reason for their success? HTC seems to be getting it, and LG is close. Nokia seems to have 5 different flagships, most carrier exclusive in the US.
Make one, cutting edge model and keep it for a year. It’s much easier to get the mind-share when people can actually figure out your model lineup.
http://en.wikipedia.org/wiki/LG_Optimus
http://en.wikipedia.org/wiki/Xperia
At least Nokia has numbers, somewhat sequential.
The irony is that the Xperia page lists “code names” for each phone model which are less cryptic than the actual model names.
Seriously.
Nokia handsets, IMHO are well engineered but overpriced for what they are. The specifications just don’t justify the cost.
Windows Phone flagship is Android mid-range.
Microsoft have blown it. The party’s over. I bought into the ‘dream’, but have decided to cut my loses and return to Android.
With the handling of Surface (especially RT), XBone DRM and Technet it’s obvious they haven’t a clue and don’t intend on getting one anytime soon.
I’m gone and I’m not coming back.
Nokia still makes plenty of innovation happen in the S40/Asha market. I had an Asha 311 and the OS is sleek, responsive, and quite capable. It has come a long way since even two years ago. Supposedly the Asha 501 is an even bigger leap for the OS.
No idea about the smartphone division, from my brief time in the store the Lumia 521 seemed like the best entry-level smartphone for the price. Spending a lot of money on stupid phones is not my hobby, so I did not compare the higher-end phones.
My armchair CEO opinion is that NOK should have demanded exclusivity from Microsoft, and been put in charge of WP development.
BTW, the real story here, is that Windows Phone is now solidly third-place in smartphone sales. Get me Firefox for WP, FM radio and a QWERTY keyboard, and I may switch.
Actually, Mr. Elop wanted to get out of the smartphone software business, and just become a licensed maker of hardware platforms for Microsoft’s products. He apparently felt that Nokia could never measure up to Microsoft’s legendary quality.
The technology for the Nokia 501 was brought in from the Smarterphone acquisition. Also, Ashas are doing worse than Lumias or Featurephones.
Actually Asha do fine.
Even Nokia started to include it in “Smartphones” rows to improve overall numbers.
Though You are right. Best performance for Nokia delivered high end Symbian and MeeGo phones. (Compare avr price numbers, they do not add up unless its Symbian doing heavy lifting)
I’m of similar opinion and I think they should still rename it to Nokia OS.
That’s true (except for upcoming 1020) but on the lower end the situation is actually reverse.
Nokias surges are driven by sales of low end devices like 520 in countries like Poland. Why is that? BC 520 still having to meet minimum Win8 HW reqs (e.g. featuring premium S4 CPU) is a hell of a deal so carriers jump on it in droves?
Why is it so cost effective? No magic here, Nokia is simply financing it, hence the hit. The point is the more successful devices like 520 become the more money is lost. Only the moore law can come to help in some (possibly distant) future, but that’s also leaves Nokia on Qualcomm’s mercy.
I have not heard it said much, but I believe the poor reputation that Windows has may be affecting sales, at least in the U.S.
The other day I was at the ATT store with my wife getting new phones, updating the family plan, et cetera ad nauseam. Over the course of the next 2 hours(!) while she took care of the details I wandered aimlessly.
On 2 occasions I heard people distinctly say they did not want a phone with ‘Windows’ on it. The first was a young 20 something lady who did not appear very computer literate. Despite the sales persons hard sell, she was firm that she did not want a Windows phone.
The other occurrence was a fellow that I distinctly heard say (rather loudly) “I had a Windows 7 phone, I’ll never do that again”. His comment was apparently in response to a sales person showing him a Lumia.
All anecdotal of course. Yet it surprised me enough to ask the sales person ‘helping’ my wife how Lumia sales were doing. At first he said that they were selling fine, but when I pressed him with what I had heard he said that nobody wants them.
Again, anecdotal. Yet I think that it is a factor worth considering.
she was firm that she did not want a Windows phone.
The fear of BSODs took her, hehe:
http://obamapacman.com/wp-content/uploads/2011/02/Nokia-Windows-Pho…
Edited 2013-07-18 22:25 UTC
Its not BSODs …
First Lumias in US had plenty of hw problems on their own.
And WinP was incomplete especially if LOYAL NOKIA CUSTOMER switched from previous Nokia flagships. (no phisical keyboard, which would be problem for sms heavy Nokia fan, no bluetooth, no …)
And Nokia did run few actions where they refunded Lumias, because of defects. That was very good behavior, but it also confirm that initial Lumias had problems. Hence some distrust to this platform.
They shoulda stuck to OSSO, I tell you!
Why should I buy good Nokia hardware with crappy MS software if I can get good Nokia hardware with good Nokia software – Jolla
What store can I go to so I can buy a Jolla phone?
Nowhere. They sold out.
So one day they’ll have real devices on real product pages.
Meanwhile Nokia is increasing their volumes sequentially and releasing phone after phone at a variety of price points.
Somehow Jolla is right and Nokia is wrong. In other news up is down and down is up.
Nokia lost 90% of its market since burning memo (in 2y).
Explain that as success…
Also do note that Nokia DID NOT disclosed N9 sales numbers.
Since Sailfish is just better than N9/MeeGo, than yes Sailfish company can do better than Nokia.
So just for future reference, you’re saying Sailfish will do better than Lumia volumes? I’ll take that bet.
As a WP8 user of 6 month, I have to say that it is crap. I find potential in a lot of aspects of WP8, but for now the OS is not finished. There are a lot of bugs in core functionality, the apps are lacking and/or buggy and the operating system feels more limiting than even iOS. I feel like I’m using a glorified feature phone (and a buggy one at that).
On the other hand, Nokia’s phones are top notch and they are also doing great things on the software side doing Microsoft’s job. It’s incredible how bad MS is handling Windows Phone.
To add insult to injury, WP8 even lacks in the feature department when compared to feature phones! But for the Steve Jobs wannabe that is Belfiore and his gang of merry men and women, all is well – all that is needed are more apps. I wish I had some of what they appear to be constantly smoking.
WP8 lacks features when compared to old Windows Mobile phones like local usb sync and vpn support.
Belfiore needs to stop going to the hipster salon for 20 year old women and actually listen to customer feedback. Ah who am I kidding, this platform has perma-stink.
To be fair: Windows Phone isn’t exactly Microsoft’s top priority or field of expertise. Surface was a serious try and that was something between tablet and laptop. Still failed there too like with Kin, Zune, etc before. Nothing new or unexpected.
Edited 2013-07-20 19:27 UTC
It appears that the high-end Lumias don’t sell any more. The increase in sales numbers was almost precisely nullified by the drop in sales price.
Nokia sold 7.4 million phones for an average of 157€ in 2013Q2.
Before that they sold 6.1 million phones for an average of 191€ in Q1.
In only 6 months the Lumia 920 price dropped from 600€ to around 330€ in Germany. This can’t be good for Nokia.
Problem is that flagships don’t make market impact until Q3, so an ASP dip was expected by most rational people.
Its just a timing thing with the way they launched. The 920 came out two quarters ago.
The WP team has pissed off the following:
Enterprise
.NET developers
Windows Mobile developers
Silverlight developers
WP7 early adopters
Wow and I just see why it isn’t a massive success. Oh and no opengl even if that is what game developers want.
But they have paid Jessica Alba to pretend that she has an interest in it.
And promising features and fixes “some time in the future” like they are doing right now and have been doing for some time, ain’t going to help with their current userbase also.
Since Google’s extended EAS support deadline for WP approaches, I’m very interested to see if the long-awaited GDR2 update for WP8 (supposedly adding CalDAV and CardDAV support) will make it or not. Initially rumored Q2 2013, then June, then July, now rumors are mentioning even August… “Shut up and ship” my ass…it seems more like “shut up, do nothing and hope all the pain will go away”.
Be interested no more, GDR2 rolls out today. Also, which WP device do you own? Given your interest and apparent advocacy for the users of that platform?
An 820. I promised myself, that I’ll wait for the 8.1 update before introducing the device to my apartment wall, but seeing as the delivery of that is promised for the first half of 2014 then I just may run out of patience after all
The 820 is in testing for GDR2 iirc, TMo (if that’s your carrier) should be rolling it out pretty soon. I know its a staged roll out so YMMV.
I have no fkin clue what’s going on with 8.1. Total radio silence. Self inflicted harm imo.
WP8 dev cycle looks like it was a clusterfuck which barely made its ship date from what I’ve been told. The NT port was apparently a huge undertaking.
Nokia also has their own WP8 feature update that’s in the wings too, so it pays to choose the top tier OEM on WP. Not sure if it’ll bundle with GDR2 or not.
Yeah well, I’m in a little forgotten corner in Europe on an equally insignificant carrier so I won’t hold my breath.
I’m also disappointed that the update preview program hasn’t panned out which would let enthusiasts circumvent carriers.
“Microsoft Partner” ze_jerkface spouting off bullshit again.
Apparently out of touch ze_jerkface wasn’t aware that the largest mobile developer study in history showed momentum for Windows Phone.
http://venturebeat.com/2013/07/17/6000-mobile-developers-android-mo…
I think Microsoft pissed you personally off, and for some wild reason you believe you speak for more than one person, despite not having personal experience with dealing with WP developers.
Don’t you have a DataGrid to be dropping onto a form somewhere?
Momentum, huh?
“35 percent are planning to develop for Windows Phone in the third quarter of 2013″
Planning.
And many have planned, developed, and released apps already. Tell me, how many apps are in the Store?
http://thenextweb.com/microsoft/2012/11/10/surging-developer-intere…
http://www.wpcentral.com/new-appcelerator-report-shows-weakening-in…
Momentum. You done playing semantics?
Edited 2013-07-19 11:34 UTC
“Developer interest in Windows Phone 7 phones dropped sharply. WP7 “very interested†levels dropped from 37.0 % in Q1 2012 to 25.0% in Q2 2012. This was not unexpected given disappointing WP7 handset sales to date and Nokia’s recently reported competitive challenges.â€
Momentum (downwards). You done playing shill?
Where exactly is the momentum and why are you posting a link from a year ago? As I have said before you lack judgement and are incapable of determining what you should shill for. I and most people here called Surface RT a dud last year but you shilled for it anyways. Did you defend the Kin?
Edited 2013-07-19 15:26 UTC
You’re asking why I posted links to interest last year, and links to interest this year showing a pick up in interest? Are you stupid?
The poll in your wpcentral link from last year doesn’t even contain Windows Phone 8 as an option. Thus the “hope” is really based on a minority of developers showing an interest in Windows 8 tablets.
Your newest link has this tidbit:
Even though Windows Phone has a significant amount of developer interest, the number is actually down from the previous quarter.
How again can you construe this as positive momentum? If anything your own links show that:
You’re extremely deluded or paid.
You either don’t read these articles or hope that we don’t.
And why isn’t Phone7 able to be included? You’re cherry picking ranges.
From your own link:
Even though Windows Phone has a significant amount of developer interest, the number is actually down from the previous quarter.
And its up dramatically from a year ago, trying to find your point, not seeing one.
What are you saying? Interest in Windows Phone 8 is up if you compare it to near the release date?
That’s like saying interest in Communism is still dramatically up if you measure against it’s starting point of 0%.
Momentum implies movement in a direction, a quarterly negative drop is not momentum.
Windows Phone didn’t begin with WP8, the tools and playform have remained the same since Phone7, the targets just change.
Interest is therefore able to be compared since 2010, not 2012. That’s dishonest of you.
Alllllright
http://stackoverflow.com/questions/7429283/how-easy-is-it-to-port-a…
WP8 uses Silverlight with some WinRT, it does not use the WinRT XAML framework.
Porting WP7 to WP8 is a recompile. You (again) don’t know what you’re talking about.
You should just stop.
As usual this blog is very concise and direct about the utter stupidity of nokia (elop in particular) and their historic decline:
http://communities-dominate.blogs.com/
he *just* added a post analyzing nokia’s 2013Q2 results.
Edited 2013-07-20 23:28 UTC