Nokia just posted its quarterly results – including shipped devices – and it’s not looking good. Massive losses, sales dropping, and no growth in Lumia sales in the US. The company is losing money hand-over-fist, and with Windows Phone 8 still months away, the company warns the next quarter will be just as bad.
The company posted total operating loss of â‚¬826 million, less than previous quarter’s â‚¬1.3 billion loss, but still a hell of a lot of money. The biggest problem is that Nokia’s Lumia sales simply can’t keep up with the drop in sales of other devices. The company shipped 83.7 million devices (feature phones and smartphones combined), which is up slightly from the previous quarter, but still lower than last year. Smartphones shipped dropped from 11.9 million in the previous quarter to 10.2 million this quarter – a 14% drop. In other words, Lumia sales can’t keep up with the drop in Symbian sales.
If you look specifically at Lumias shipped – the product line that matters for Nokia’s future – the company shipped 4 million Lumia devices worldwide, which, while double that of the previous quarter, is still just a drop in an ocean compared to what Nokia used to sell. To put this into perspective: Samsung supposedly shipped round and about 50 million smartphones this quarter quarter, while Apple shipped around 30 million iPhones.
Nokia’s performance in the US is even worse. The company shipped a measly 600000 devices in the US this quarter – that’s combined smartphones and feature phones, both Symbian and Windows Phone. Despite the massive marketing push for Lumia devices in the US, Nokia didn’t see its sales increase quarter-over-quarter. The company sold 600000 devices in the US in the previous quarter, and they sold the exact same amount this quarter, despite the hundreds of millions of marketing money, including free Xbox consoles.
The final bit of worrisome news for the Finnish phone maker comes in the form of average selling price. The average selling price for Lumia devices dropped from â‚¬220 to a mere â‚¬186. This means the company isn’t making a whole lot of money on the Lumias it does sell, which doesn’t bode well for the future. Remember: Nokia warns that the next quarter will be just as bad as, if not worse than, this one.
To put all this into perspective, Tomi Ahonen:
To understand the context, when Elop took over, in the first full quarter he was in charge, Nokia’s smartphone unit sold 28 million smartphones and had 29% market share. Nokia was twice as big as Apple and three times bigger than Samsung. Nokia’s smartphone unit was growing sales strongly – the year 2010 Nokia had seen bigger growth in units sold of its own smartphones than Apple had with the iPhone! And Nokia’s smarpthone unit was profitable, and again, the first quarter Elop was in charge, Nokia’s smartphone unit generated a Nokia-record jump in its profits.
Now the unit sells 10.2 million smartphones, the market share is down to 6%. While the industry grows strongly, Nokia’s smartphone sales shrink.
Nokia is not doing well – no matter how you spin it, no matter which starting point you take. What was once the undisputed market leader of the mobile phone industry is showing absolutely no sign of recovering from the one-two punch from Apple and Android. It’s getting ever harder for Elop to maintain that Windows Phone was the right choice – especially now that they effectively have to start all over again when Windows Phone 8 ships.
Heck, the company probably would’ve done a hell of a lot better had it focused on Android instead, since it’s clearly not the hardware that’s holding them back.
I’m glad the MeeGo/Maemo team got out in time to form Jolls – maybe we’ll find some of that true Nokia spirit there later this year.