63

Nokia Q1 2012 financial report highlights a €590 loss, strong Lumia US launch

WP Central

Nokia released its Q1 2012 interim financial and operating report today, highlighting a €590 million loss. The data is the result of the slow and painful transition from Symbian to Windows Phone, as well as more affordable competition from Android. Ironically the only region to illustrate positive results with regards to volume numbers is North America with a 20% increase (compared to Q4 2011). 

Stephen Elop explained in the report the Lumia handset reception and how some markets, including the UK, are proving more difficult to penetrate. 

"We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging."

According to Elop, the manufacturer exceeded expectations in terms of sales with the Lumia 900 launch in the U.S., though no figures were provided. The issue with markets such as the UK is how competitors have secured loyal support, whether it be RIM, Android or the iPhone.

Nokia has announced plans to begin rolling out the Windows Phone "Tango" Lumia 610 in Asian markets at the end of April. Coupled with the Lumia 900 heading to the UK as well as a number of other international markets, Nokia will start to have a comfortable level of coverage.

Source: Nokia (PDF)

0
loading...
0
loading...
0
loading...
0
loading...

Reader comments

Nokia Q1 2012 financial report highlights a €590 loss, strong Lumia US launch

63 Comments

MS should have gotten off their butt a long time ago. Now they're trying to compete with already established companies that have cult like followings. Plus, they need to bring something to the table that will make these phones a must have. Xbox had exclusives that turned it very popular. WP needs the same treatment

The thing is, Nokia may have strong sales in comparison to other WP7 manufacturers but when compared to Apple or Android handsets, the sales are quite poor.

Thank you for that obvious statement.  Android is doing hundreds of thousdands of activations per day.  I'm sure the iphone is too.  You expect WP to gain mindshare overnight from such inbeded ecosystems?

There were some interesting statistics in a Finnish daily this morning reporting on Nokia's Q1 results. It took both the iPhone and the Samsung droids from one to one and a half years after launch before their sales began to increase significantly. What's also interesting to note is that compared to the sales of the iP during the first Q after it's launch (just over 1 million), the Lumia isn't actually doing so bad.

Are those activations new phones or old Android phones that cannot be upgraded being dumped in third world countries for under USD25? Not being sarcastic, just curious to see if there is a chart somewhere where I can see what are the Android phones being activated :-)
 

LOL! First they couldn't get any traction in the US, now it's flipped. What happened? I seen so many articles saying how a lot of no-US stores were selling out. 
 
And "selling" well in the US might be a bad phrase. They are pretty much free. 

A phone is never "free". Specially when you sign a 2 year contract. And you still have to pay full price for off-contract. Don't confuse subsidized with free.

No, it IS "free".
The 2 year contract is for the service not the phone. If you pay full retail for the phone you monthly bill will still be exactly the same.

Actually after talking to Tmobile, the plan is LESS if you don't add the phone, and get just the sim and buy a phone. I can pay $80 a month w/ new phone or $50 w/o new phone.

@the magic school bus - do you have any idea how business works? What company gives away free phones? Money is always being sought after. Even though you pick up the phone without any large upfront costs, part of your monthly plan is going to the manufacturer. Please stop being ignorant.

Yes because AT&T likes money but the others are right, AT&T still pays Nokia for the phones and subsidizes them so we can get them cheaper.  If you buy outright the plan should be cheaper but it is not and AT&T just pockets the difference.  T-Mobile makes it right by charging accordingly but no one else follows this consumer friendly logic and they probably won't since when you buy the phone out right they make more.  In their defense, unless you bought every phone out right they still need to cover the cost of whatever they got you to sign a contract for in the first place but if you have no contract you should technically get a discount but they won't do that unless it's t-mobile.

Well, the report does mention that North American sales are up 75%, and this doesn't even cover the Lumia 900 (Those sales will be Q2).

I think that alot of this cost as they mentioned is due to restructuring the Nokia Siemens networks. Over $700million. Whatever that means. But that doesn't affect sales. They will bounce back definatley. This and the next quarter will most likely be their worst because if restructuring costs. But other WP7 OEMS need to step up their game with WP7 advertising. Microsoft needs to throw money to help that cause. Nokia cannot do it alone

Am I reading the CNET article correct that says they sold 2 million of the Lumia 900?  Maybe they are talking about total for Lumias world wide?  Cause if they sold 2 million of the 900, why is that not news on all these sites that are reporting doom and gloom on numbers we already knew were gonna be bad?  

We won't know how many Lumia 900s they sold until they Q2 report. It could be as many as 5 million or as little as 500,000. Time will tell. But so far, it seems that Lumia 900 is best selling Nokia in recent years.

It's little exaggeration. I believe, N8 and recently N9 were better selling than 900 in limited time considered so far. Over longer term, 900 will be beter than N9, but I doubt it will match N8, since 900 will be replaced by Apollo phones after 6-9 months, whereas, N8 wasn't replaced by any other better symbian device that time. 

Well if you would like to send me a cheque for $350 I would agree with you that they are 'free'. At my AT&T store there are significant numbers of dissatisfied Android customers ponying up non-subsidized prices for the 900. :-)

If you actually worked at a AT&T store then you would know taht the phone is $99 bucks on contract and getting the rebate from Nokia = free. 

You're missing the 2 year contract you also signed up for.  Even with the rebate Nokia is still getting between $300-$350 from AT&T for every device sold.  Without the rebate it's $400-$450 (basically the non contract price).  Nokia makes money on the initial sale.  The carrier makes their money back (plus extra) over the 2 year commitment.  Their is no such thing as a free phone when you sign a 2 year agreement.
Walk into AT&T and say you want a Lumia 900 on their pay as you go plan, and be prepared to open your wallet.  It will be nowhere near free or $99.

I knew this Nokia giving free Lumia 900s was typical internet bs, but for a moment I imagined me with one. Hate internet lies, they're so common, it's a plague.

The UK problem is the clueless networks. Apart from 3 I don't think any really "get" smartphones and data. Europe used to lead world in mobile tech but look at our useless data packages and lack of 4G now!
Voda, Orange and Telephonica are run by beancounters and follow numbers of units out the door for any decisions. If WP gets traction in the US and Asia then apps and support will follow and eventually us in the UK will join the party.

Even Thailand is better than uk:) I was shocked at how dreadful London and various operators were. You can go pretty much anywhere in Norway and get infinitely better quality

Yeah I think they are wording it wrong.  I think they mean total between all Lumias.  I would love  for it to be that 2 million of the 900 were sold.  I'm thinking the 200-500k mark is more realistic though.  

Can we get a little clarification? When he said:

"We exceeded expectations in markets including the United States"

Is that referring to the 710 that has been out on Tmobile? I thought that the L900 was not included in this quarterly financial statement since the phone literally just came out about a week ago.

Second this for clarification. Unless they are talking about sales to distributor cuz I thought Q1 ended March 31?

I think, he may have made that statement as an overall impression so far, not related to just Q1. 
In order to know exactly, in what context it was said, you have to listen to Q&A session, since these articles are just writing statements, not the questions to which this answer was made. 

I think the burning question is: Did the actual Quarter 1 financial results include the Lumia 900?

Nokia recently stated they are making them as fast as possible to "meet demand". All of this falls outside Q1 results so Q2 will be interesting indeed.

Even thought they had a net loss from Last years's Q1 total. They still made a ton of money this year's Q1! Can't hit home runs every time you bat. 

Q1 is though especially for a new platform in a very competitive market. Once Nokia delivers an array of Lumia handsets covering different price ranges and a Lumia price drop in the UK they should be fine.

Lumia 800 is far to expensive but keep chipping at it and they should be fine.

What is needed is for Nokia to stay the course and keep delivering compelling software support with its traditionally great hardware.
And Nokia needs the 610 asap to fight the volume of Androids.

Given the fact that Apple does not disclose how many of each iPhone model is sold,they simply refer to total iphones sold my interest and focus is how well the Nokia Lumina phones are doing overall.  Apple has launched their phone in significantly more markets so hopefully Nokia is ramping up production as they push out a global focus.
While I don't want to move to AT&T its a strong consideration if Verizon fails to get a WP8 device in the fall, specifically from Nokia since I feel they will be focused on more innovative designs and features.
 

I really hope the media doesn't overblow this story. It could damage Nokia's reputation. I can just imagine trying to buy a Nokia phone and the clerk telling me its risky because they're gonna go out of business. That can put a very negative image in peoples minds

When a former industry giant is now posting continuous quarterly losses (of $1.4 Billion!), and sees their device sales tank by half, year over year, while their cash position dwindles to nothing....
Well, that's big news.
And it's not over; guidance for Q2, according to Nokia, will be worse than Q1.
At this rate, they may burn through all their cash by year end.

Keep up the good work Nokia. Little by little you will gain ground. All the positive words from users are going to win in the end. Just keep those updates coming in a steady pace and Android users will come over, one by one.

The biggest flaw the UK has are the sales men who still haven't got a clue about the windows phone platform. My girlfriend went into a Carphone warehouse to buy a lumia for herself whilst i was at work and those stupid salesmen convinced her to buy an iphone>_< i was sooo mad. She told me they said this about it and that about it and that the iPhone is much better and that you cant do this and cant do that with windows phone, what a load of bulls#it!!! Those scum bastards

Omg that's pissed me off so much. I feel like quitting my job to work at phone store part time. I bet I would sell so many Lumia's

Heck I would even hire semi naked girls to hold the Nokia for me whilst im demonstrating what it can do.. But heck all a sales man wants is his commission. I thought Nokia would pay them well..

just thought I would point out that i work at Carphone and we dont get any comissions also that 4 out of 8 staff in my store use Lumias and think there amazing phones. I have the hardest time selling them because simply put people are sheep and want what everyone else has. Its a pretty poor experience by the sound of it in your local store but you can not tarnish us all with that brush and believe me selling Lumias isnt as easy as I would like it to be...

I respect your point and clearly I just had bad things to say about the local store my girlfriend visited for the bad experience, it just made me a bit angry:] about the commission thing I actually thought you did get commision since sales men in phoneshops are always very pushy so they can make their money. I should check my facts. Thanks for pointing out.

On another note the sheep thing is so TRUE, I always try to convert my workmates to a windows phone and their first reaction is "nah I heard they are shit" but as soon as I let them have a fiddle with my phone and I demonstrate the features and compare them to iPhones they suddenly change their opinion. So what it takes to convince is to actually compare and show that it can perform better than an iPhone in the situations and features they need and then let them decide. I have converted 3 people so far including my boss. My next task is to convince IT to stop giving away iPhones as the work phones and implement windows phone 8 when it arrives.

I don't think that would be wise at all. The Android handset market is over-saturated and the only one making any real money is Samsung. Even HTC is struggling selling Android and making a good profit. Apple is able to over-price its products all to hell as usual. The best thing is separating yourself from the market, and Windows phone is the best choice right now.
If Nokia switches to Android, they are done for.

They're probably done for anyway. 
I give them a year before they either go belly up in a Ch. 11 filing, or the valuation is so low, another company buys them, breaks them up, keeps the patents and manufacturing facilities, and goes on their way.

If WIndows Phone gains some good traction, which I think it will, they will be fine. It is too close to call as they are still transitioning out of Symbian, we will have a better idea near the end of the year or next. If their valuation goes real low I could see Microsoft picking them up in which case they will stay around.

Anyone who thinks that Nokia will just go out of bussiness is an idiot.
It's a very strong company with healthy bussiness model overall.
But the rapid change from Symbian to WP is really hitting the profitability short term.
Feature phone market is getting worse for Nokia, so that's not helping.
 
The new Nokia will be leaner but meaner, armed with better smartphones.
How lean depends on success of windows phone and that's up to customers.