Linked by Thom Holwerda on Thu 23rd Jan 2014 11:54 UTC
PDAs, Cellphones, Wireless

Nokia has just posted its results for the fourth quarter of 2013 - this is the last set of quarterly results which include the devices division, which has been sold to Microsoft. The parts that remain at Nokia are doing relatively well, but the holiday quarter for Lumia was a letdown.

Exactly how much of a letdown we can't say, since Nokia has - curiously, but tellingly - stopped reporting Lumia sales (update: Nokia has confirmed it sold 8.2 million Lumias). However, they do state that Lumia sales in the fourth (holiday) quarter were down from the third quarter, but up from the year-ago quarter, meaning they sold anywhere between 4.4 and 8.8 million Lumias during the holiday quarter of 2013. Tweakers' Arnoud Wokke has done the math, and concludes Nokia sold between 7.55 and 7.98 million Lumias (update: Nokia has confirmed it sold 8.2 million Lumias). Average selling price dropped again, most likely due to the popularity of the low-end 520. This gives Nokia a smartphone market share of about 2-3%.

All in all, the devices division, with its crashing Asha sales and struggling Lumia sales, was a clear stone around Nokia's neck, kept somewhat afloat by cash injections from Microsoft. However, those injections apparently weren't enough, and by now, we can conclude that Microsoft was effectively forced to step in and buy Nokia's devices division - lest someone else do it.

With this being the last quarter in which Nokia reports on its devices division, an era has come to an end. Now it's up to Microsoft to try and see if they can make something out of the Lumia brand - however, without the Nokia name, that's going to be a very tough sell.

Just ask the Surface department.

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Comment by Nelson
by Nelson on Thu 23rd Jan 2014 13:54 UTC
Member since:

Not going to mince words here, these results are terrible. Every conceivable metric is down for devices. -7% growth during a holiday quarter is unacceptable.

This took what little wind they had in their sales all away and raises some questions as they transition to Microsoft. I'll be interested to hear Microsoft field questions on their strategy today.

I didn't really see this coming at all and I was wrong in my own projections for Q4. I wanted at least 30% growth, at least, hopefully more. What I got was truly terrible results.

I think it's worth revisiting a few things: Nokia's Android Asha replacement most importantly. The last time this was brought up, I shrugged it off as an impossibility. Since then I've heard compelling arguments in favor of Microsoft actually launching the handset.

Another thing worth revisiting is Microsoft striking deals with regional OEMs. Can this move the needle on volumes in an acceptable direction?

As I feared when the deal closed though the detailed Lumia breakdown is no where to be found so it'll be hard to pinpoint exactly what went wrong, and I don't hold out hope for Microsoft being forthcoming with the information either.


Reply Score: 10

RE: Comment by Nelson
by hamster on Thu 23rd Jan 2014 14:19 in reply to "Comment by Nelson"
hamster Member since:

Respect for admitting you were wrong.

About the nokia android phone. I don't see it as a posibility. I would think that Nokia has some limits on what they can do on the mobile phone area for x years.

Reply Parent Score: 2

RE[2]: Comment by Nelson
by Nelson on Thu 23rd Jan 2014 15:07 in reply to "RE: Comment by Nelson"
Nelson Member since:

True, but I actually think now that Microsoft will launch this handset.

Consider the following:

- Microsoft already has their services on Android (Skype, Outlook, Xbox Live games, Xbox Music, etc)

- We live in an Android world. Why not Microsoft Android? It can be positioned as a cheaper alternative to Google Android where you'd need to pay out licensing fees to Microsoft.

- Microsoft has a volume play to put their services front and center, like Kindle Fire. Microsoft can curate their own Android app store like Amazon does.

- Microsoft can push their development platform onto Android. If they buy out Xamarin/Mono then they already have Xamarin.Android which is a lot of the way there already.

- Microsoft can still push Windows Phone. Just push it in addition to Android devices replacing the low end, and iOS Services

- S40 on Asha is already foreign to Microsoft, so they might as well go to Android for that lineup.

- High growth exists mostly in developing countries. Android lets them reuse existing manufacturing lines, component supplier BSPs, and has a warmer reception from carriers

Reply Parent Score: 4

RE: Comment by Nelson
by Nelson on Thu 23rd Jan 2014 14:40 in reply to "Comment by Nelson"
Nelson Member since:

Btw, NOK shares are down on D&S miss (a segment they will soon no longer own) even as they beat EPS. I'm increasing my position, its quick money when it pops back to ~8.

Reply Parent Score: 3

RE: Comment by Nelson
by TBPrince on Thu 23rd Jan 2014 15:47 in reply to "Comment by Nelson"
TBPrince Member since:

Definitely disappointing, mostly because Lumias seem to be everywhere.

Carriers here almost only advertised Lumias during holidays and many people I know switched to Nokia since their contracts were expiring.

I think that to better put this in context, we should understand what are results for other handset makers. If, for example, Samsung phones were up 10% during holidays and Nokias were down 7%, that would be very meaningful.

If trend was down for other handset makers too, that would be less than a problem, being related to current economic situation.

Anyone has news about what Apple or Samsung posted ?

Reply Parent Score: 4

RE[2]: Comment by Nelson
by Fergy on Thu 23rd Jan 2014 23:56 in reply to "RE: Comment by Nelson"
Fergy Member since:

Definitely disappointing, mostly because Lumias seem to be everywhere.

I have seen one person with a windows phone. He was so happy the day he could switch to an android phone.

Reply Parent Score: 1

RE[2]: Comment by Nelson
by Nelson on Fri 24th Jan 2014 12:06 in reply to "RE: Comment by Nelson"
Nelson Member since:

Samsung posted a drop in profit, also posted lower volumes in Q4 and issued guidance for even lower volumes in Q1.

Something interesting is happening.

Reply Parent Score: 3