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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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.
Member since:2009-05-19
Yes... Yet, unlike you, we have Nokia's results. You actually have nothing to prove otherwise. The likelihood of it being a low margin device is higher and has more backing evidence than your assertion.
And if you're going demand a factual BOM(that only covers the manufacturing part), then I'll have to ask for the same to prove your side.
Member since:2006-01-04
Don't need the BOM info to figure this out.
Look at the earnings report and the distribution of 52x handsets among all WP units:
Lumia sales up 19%. ASP dropped from €157 to €143 which is down 9.1% Selling more, getting less per unit average.
Adduplex shows that the 52x makes up 32.8% of all WP handsets, not just Nokias. So it wasn't recent price drops on older handsets that killed the ASP because they weren't selling a lot of the older, higher margin Lumias. But loads of 52x though.
Lower margin ; QED.
Member since:2007-01-13
The Nokia 520 is nothing more than a generic bottom of the range ARM smartphone. The profit margins are likely to be very high (>100%).
Member since:2009-05-19
Member since:
2009-05-19
I'm sorry, but weren't you the one yapping about that the low end devices aren't low margin? These numbers and previous quarters just ads to the proof that they are selling low margin devices, that have high development and support costs.