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 unclefester on Wed 30th Oct 2013 08:11 UTC in reply to "RE[5]: Comment by Nelson"
unclefester
Member since:
2007-01-13

These numbers and previous quarters just ads to the proof that they are selling low margin devices, that have high development and support costs.


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%).

Reply Parent Score: 2

RE[7]: Comment by Nelson
by JAlexoid on Thu 31st Oct 2013 01:15 in reply to "RE[6]: Comment by Nelson"
JAlexoid Member since:
2009-05-19

>100% margins are only possible with production costs being 0.

Reply Parent Score: 2