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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Comment by Nelson
by Nelson on Tue 29th Oct 2013 17:02 UTC
Nelson
Member since:
2005-11-29

Just wanted to point out I called the volumes for this quarter with 100% accuracy. As in exactly what I predicted would happen did happen. Exactly. Down to the percentage increase.

http://www.osnews.com/thread?575084
I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.

A few important things to take away here: NSN and HERE continue to perform strongly.

D&S deepens losses (or increases investments, depends how you view the glass) but that's largely irrelevant now that they're part of a rich behemoth like Microsoft.

Lumia shipments continue to increase at a nice rate, its been around a year of sequential increase (and over a year I believe of underlying profitability).

For comparison, LG had flat shipments this quarter. That's an opportunity for Nokia (and others) to catch up to the other OEMs.

re: 520. I think Nokia moving volumes is good because it increases the developer target audience which improves the ecosystem and drives high end sales. We'll see how the 520 successors perform.

Next quarter I expect a stronger sequential increase than this due to seasonality. They can probably crack 10 million on the back of compelling low and mid range devices.

It feels good being right though, I've got to say.

Reply Score: 3

RE: Comment by Nelson
by M.Onty on Tue 29th Oct 2013 17:18 in reply to "Comment by Nelson"
M.Onty Member since:
2009-10-23

Just wanted to point out I called the volumes for this quarter with 100% accuracy. As in exactly what I predicted would happen did happen. Exactly. Down to the percentage increase.

http://www.osnews.com/thread?575084

I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.


Might I suggest the Always Uninterested In Exact Financial Predictions About a Once Great Handset Maker Club as a more precise, if less succinct, name?

Reply Parent Score: 6

RE[2]: Comment by Nelson
by Nelson on Tue 29th Oct 2013 18:57 in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

They're so uninterested they consistently make bad calls? That's a new one.

I get made out to be a shill, a troll, an astroturfer, etc but quarter after quarter it is my predictions which stand out as being on the mark. Every time.

Reply Parent Score: 3

One quarter? That's (relatively) easy.
by sgtrock on Tue 29th Oct 2013 17:23 in reply to "Comment by Nelson"
sgtrock Member since:
2011-05-13

What's your prediction for next year? The year after? Is the new Microsoft smartphone division ever going to turn a profit?

Reply Parent Score: 3

Nelson Member since:
2005-11-29

I think they'll turn a profit at around 12.5 million which is what Microsoft guided in their investor slides, so perhaps by Q2 and Q3 next year at current trajectories.

As far as volumes, I'm expecting stronger Q4 than this quarter. Anything beyond that depends on product rollouts and stats I extrapolate from which aren't out yet. And there's a little intuition mixed in there somewhere.

I expect a profit short to medium term after the MSFT deal closes. How fast they get settled within MSFT can change this.

Reply Parent Score: 3

RE: Comment by Nelson
by JAlexoid on Wed 30th Oct 2013 00:30 in reply to "Comment by Nelson"
JAlexoid Member since:
2009-05-19

A few important things to take away here: NSN and HERE continue to perform strongly.

And a more important note to make is that NSN and HERE are largely irrelevant to you general narrative of WP growth.

We also were the ones that will go "told you so" with "it's the low margin devices".
But it's good that you are focusing on the positive.

Reply Parent Score: 6

RE[2]: Comment by Nelson
by Nelson on Wed 30th Oct 2013 01:21 in reply to "RE: Comment by Nelson"
Nelson Member since:
2005-11-29

My narrative of WP growth? This is yet another quarter of double digit unit volume growth. They're at double digit share in many countries. The ecosystem has grown considerably. They're #2 in many regions already.

The hype is real.

Reply Parent Score: 3

RE: Comment by Nelson
by bnolsen on Wed 30th Oct 2013 01:56 in reply to "Comment by Nelson"
bnolsen Member since:
2006-01-06

to go from arterial bleeding to hemorraghing isn't exactly a good success metric.

Reply Parent Score: 4

RE[2]: Comment by Nelson
by tylerdurden on Wed 30th Oct 2013 03:31 in reply to "RE: Comment by Nelson"
tylerdurden Member since:
2009-03-17

The PR world revolves around selective delusion. So "hitting rock bottom" being heralded as unquestionable proof of a "most successful buoyancy strategy" should not be that surprising. They can't sink any lower after all.

Reply Parent Score: 3

RE: Comment by Nelson
by crocodile on Wed 30th Oct 2013 07:38 in reply to "Comment by Nelson"
crocodile Member since:
2010-01-18


I called for a little less than 9 million and ~20% sequential growth in my analysis. Just something to keep in mind before the Always Wrong Club shows up.


What is the point of this when Nokia actually is loosing money by selling smartphones??

Nokia 2 years ago had ~33% of phone market and now it has ~3.3%. Clearly this is a failure for NOKIA and a sequential growth means nothing when one has a very small percentage of the phone market!

For every small company(and small "fishes") it is very easy to show sequential growth and this makes the sequential growth meaningless.

Reply Parent Score: 4

RE[2]: Comment by Nelson
by hamster on Wed 30th Oct 2013 08:19 in reply to "RE: Comment by Nelson"
hamster Member since:
2006-10-06


What is the point of this when Nokia actually is loosing money by selling smartphones??

Nokia 2 years ago had ~33% of phone market and now it has ~3.3%. Clearly this is a failure for NOKIA and a sequential growth means nothing when one has a very small percentage of the phone market!

For every small company(and small "fishes") it is very easy to show sequential growth and this makes the sequential growth meaningless.


Nelson enjoys taking numbers out of context. He's also not affraid of moving the goalposts. Which is why he claims to be right every time. He did in one thread go from 10 to 8 million sold phones and now he was spoton the 9 million sold units...

Reply Parent Score: 4