Nokia releases financial report: 4 million Lumias shipped in Q2 2012, doubles Q1 results

By Rich Edmonds
last updated

Nokia has released their Q2 financial report today, which paints a somewhat unexpected picture. According to figures present in the document, Nokia has managed to sell four million Lumia Windows Phones worldwide. This is up from their previous report of Q1 where Nokia CEO Stephen Elop stated the company "exceeded expectations" in the US.

We've been looking at the growth figures for the previous quarters and the situation looks strong for the Lumia line of Windows Phone with exponential growth taking place. Pushing out over a million devices in Q4 2011, followed by further increase in Q1 2012, we're seeing a positive trend with four million Lumias heading to consumers. Carriers in Canada have also previously revealed they are pleased with how Nokia Windows Phones have been received by customers. These numbers are positive, with the "Rolling Thunder" marketing push proving to be successful, not to mention the continuous rollout of both Smoked by Windows Phone and Dare to Live campaigns.

The issue that Nokia faces currently is to keep consumer interest high in current generation of Windows Phones, especially with the recent announcement that current hardware wont be receiving an Apollo update. The manufacturer has continued to drop the prices of Lumia smartphones with the Lumia 900 now available on AT&T for just $49.99.

We believe the company has a strong position within the Windows Phone eco-system, which can potentially paint a positive future with Windows 8 and Apollo just around the corner. It'll be interesting to see what Nokia brings to the table regarding next generation hardware. With Nokia reducing the pricing for their flagship Windows Phone, Nokia is ensuring availability to a wider audience. Pushing in multiple markets also aids Nokia's expansion, as well as taking the platform itself to new geographic locations. The company has managed to start rebuilding the brand, now it's time to start pushing up the numbers.

What do you think of these figures? Do you belive the future looks bright? Let us know your thoughts in the comments.

Developing as more information comes to light...

Source: Nokia

Rich Edmonds
Rich Edmonds
Senior Editor, PC Build

Rich Edmonds is Senior Editor of PC hardware at Windows Central, covering everything related to PC components and NAS. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a PC chassis. You can follow him over on Twitter at @RichEdmonds.

112 Comments
  • Its alright, I see more ppl talking about Nokia and windows phone by the week. I have a optimistic look for the upcoming windows 8 ecosystem (phone, tablets/pcs, Xbox), head over to Engadget and the comments are full of "Nokia should have chose android and they would be number one by now...." I don't think Nokia wanted to be fighting over the scraps that Samsung has left because they would still be in the same position they are now
  • Also znet paints a horrible picture in their article. They only go by profit numbers. Strange how many tech sites are adamant about painting a negative picture about Nokia, WP. I would like to see MS commercials for WP and surface pop up that are cool once window 8 is released. Anything they do can be better than the siri is uncomfortable with John malcovich stalking the phone commercial. Apple got it right with their apple vs PC guys commercial-ms needs to express this is not windows of old.
  • "Also znet paints a horrible picture in their article. They only go by profit numbers."
    Pretty simple explanation for that. Contrary to popular belief, companies don't exist to make you, me or anyone else happy except for investors. Therefore, profit=good, no profit=bad. So, based on that premise (also widely referred to as "reality"), how else do you expect tech sites to report on an earnings call? Nokia can ship 10 billion handsets, but if they don't make a profit they're still doing poorly, m'k?
    Theoretically if their losses continue as such for just a few more quarters, given that theyre sitting on about $4 billion in cash, the headline this time next year could very well read something like "Nokia Files For Bankruptcy" if they dont get on the ball, and soon. Their and Microsoft's abysmal marketing efforts in the U.S. really aren't helping their situation. This Brooklyn Dodgers' attitude of "wait til next year" is going to drive them right into the grave. It's sad, but I could easily see tech sites sadly clucking their tongues, much as they are doing with RIM right now, lamenting what a shame it is how a "once great company" could meet such a dismal end due to corporate missteps.
  • Yes, profit, and only profit matters, but not even Nokia expected a lot of profit at this point in their business strategy. Good sales numbers are a lead indicator of future profits and a verification that Nokia is on the right track. They have proven they can generate new customers for WP and that has gone a long way to build the WP ecosystem. Now, if Q3 2013 is still showing them in the red, they may have a problem.
  • Actually Nokia did originally expect to be putting up better numbers by now - they have publicly announced several times that things will be worse than they expected.
  • Well, the stock price is up +8% or so - so apparently most market participants have a positive view about today's news. This is a much better indication about how to judge this release. Talk is cheap, anyone can write a biased article, or forum post - i would rather trust those who put some money on the line.
  • i agree, and in a investor's shoe i wouldn't want the company to only have short term outlook, i would want them to be able to make profits long term so i don't have to pay transaction fees so danm often
  • The bad news was already built into the stock price, the bump is because the cash burn wasn't as bad as expected (although this may be artificial due to some early royalty payments) and better than expected profits from Nokia-Siemens-Networks.
  • ZDNet's James Kendrick hates Windows Phone, even though he never used one. Adrian Kingsley-Hughes commentary has been sorely lacking in depth, at least lately, and Larry Dignan is highly skeptical of Windows Phone and Nokia, and pretty much repeats the same everytime Nokia's name comes up. Look to Matthew Miller or Mary Jo Foley if you want ZDNet commentary that actually engages with Windows Phone, rather than parrotting old views they're unwilling to re-examine.
  • ^This.  Although, Matthew is only a proponent of WP IF posters don't slam him or criticize him - too much pressure, and he starts to back peddle (at least that has been my impression of his blogs lately, not to mention his recent blog post regarding the Nokia 808).
  • Naughty naughty - what Nokia actually said was:
    We shipped four million lumias smartphones in q2
    When companies give you a shipped figure they are trying to hide how many were sold to end consumers.
     
     
  • Ah, nice catch. Big difference between shipped and sold. Misleading headline, to say the least. Still, it looks like the Lumia series is doing well.
  • Keep in mine that Apple and Google do the same exact thing.
  • Actually they don't, Apple in its financial results uses the sales rather than shipped figures - don't take me word for it, reading their quarterly results.
  • no they do, they are counting the "sale" to the carriers, not to the end user and where applicable, they count the Apple store sales.  Apple only controls the entire channel at their store sales, they do not know the channel numbers at the carrier stores.
  • Apple also gives their channel inventory in the conference call - so we do get effective sales numbers. It doesn't really matter though - Apple manages their inventory brilliantly and the product sells, aside from a little channel fill when a a new product launches you can assume shipments == sales.
  • And in the corporate world, that is a sale.
     
    When your a company and "sell" your item to a carrer, it is a sale and as a company, that is how your figures are based. This is not a trick, this is true sales for the company. And yes, Apple and Android do this too. A sale is a sale.
     
    You need the numbers from the carriers to give actuall sales to customers or end users to get actuall correct numbers that you are looking for.
  • So you actually think there are millions of lumias sitting in the back stockroom of att unsold? Really?
  • Wow, headline already corrected! Cool.
  • Wasn't exactly a catch, but headline reflected for those who are picky ;-)
  • Picky? We're just holding you guys up to a higher standard, LOL!
  •   Nokia, do not sell directly to consumers. Those devices are sold to carriers etc. Whilst this does not mean they in the hands of consumers, Nokia have sold those handsets. Further to that, this is the model it would be difficult for Nokia to report on how many were in the hands of buyers.  RB
  • Exactly this!  Some on this board just don't want to accept this fact. 
    Thanks, Robert.
  • Residing,
     
    Not that this will happen to Nokia, but if you need an example of the difference between shipped vs. sold, just remember what happened to the Palm Pré and other webOS phones.
     
    For the record I'm not a Nokia hater. My first smartphone (if it can be called that) was a Nokia 5800 XpressMusic which I did buy directly from Nokia who at least 3 years ago did sell directly to consumers. My next WP (I have the Focus) will very likely be a Nokia as well.
     
  • Yep understood, but obviously it would most certainly be interesting to know how many of that 4 million IS in the hands of consumers, so we can gauge just how well it's really performing in the world.
  • +1 I have no doubt that Lumia is selling well, but one would think the carriers have the capability to report concrete sales to Nokia, at least quarterly. If you were a Nokia shareholder, wouldn't you want to know how many phones are on people's hands instead of on store shelves?
  • no not really, by that point you've got your money (from the carriers) so why should you care?
  • Exactly!  Unless the carriers don't know how supple and demand works hopefully they are not ordering way to many devices to meet customer demand.
  • ^This.
  • well, the carriers did say they were pleased with the sales figure... im taking that as "we had to order more handset to meet unexpected demand!" so ya, may be not all 4 mil are in customer's hands but i would assume most of it are
  • Exactemento, well said sir.
  • Nokia does not sell in first place they devices. The big companies do that, like at&t and other. All companies look only at the numbers they shipped, because thats like the expecation to be sold on the market. They would not produce 4mil. If they are not sure about that. They would produce only 1mil. So i'm on nokias side i belive in them, they know what they do.
  • As far as I know every company uses shipped figures.
  • Actually this is not naughty as they are reporting sales to its customers and Microsoft, Sony and most others do the same thing mainly because they never really know the numbers sold to end users.
     
    The conversation over whether it is shipped versus sold is pretty much a nonsense. What this says is that Nokia's customers bought this many units which is a good thing.
     
    Next we will be trying to figure out how many they have in the pipe of if they are shipping via sea freight or air.
     
    Really it makes no odds, I think 4 million units shipped or sold depending on how you want to spin it is very much more than many thought despite positive murmurs form the supply chain.
     
    P.S. It is annoying that even though you have a linespace you need 2 make one appear.
  • @P.S. part
    ya, that threw me off a couple times too lol, and the editor also scrolls my window for no apparent reason when it load, it could be an Opera thing though...
  • Nokia sells to the carriers not the end users.  They could only tell you sold to end users for the devices that are purchased via Nokia.com or Nokia stores.
  • Elop clarified during the conference call that the number is indeed numbers sold not just shipping. 
  • Hey Rich, on the second to last paragraph, I think you meant next generation hardware.
  • Wehey! Good catch, sir :-)
  • You're welcome ;-)
  • It would be nice if the article compared these sales figures to other well known phones in their same lifetime - 4 million phones doesn't mean much to me, equivilant to 5% (made up) of iphone4s means more to me
  • Some perspective: Galaxy S III had over 9 million preorders fairly early on, granted they have every carrier to lean on. 4 million is good but not great, we need the momentum i just hope Nokia can keep the buzz till q3/q4...
  • Cheers for the comparison, yeah, we have alot of catching up to do!
  • A few more carriers would be nice
  • Verizon is the big one, I think if Verizon advertised WPs they would sell a lot.
  • If Verizon sold more than one handset then WP would do a lot better. I love my Trophy but if they don't pick up WP8 by the time my contract is up next year, I will be leaving.
  • the thing is, i don't think it's fair to compare it that way... i mean if u compare it to iphone which only has 1 phone each gen against the Galaxy III, the Galaxy III would be murdered as well
     
    may be we can take into account the growth rate as well? (im not specialized in this so just throwing suggestions)
  • If we get a pureview WP8 handset that will get people seriously thinking about Nokia again and WP as a shoot off as well
  • Not everybody is a camera spec geek. Nokia will still have to "sell" PureView through solid and repetitive marketing.
  • While not everyone can read into camera specifications, a "41MP" listing would certainly catch the eyes of those who are browsing handsets in a retail store (or online).
  • and a sem-educated user knows, 41MP is just a number. You can get better pictures off a good 7mp camera vs a cheap 19mp camera. If they have had one or 2 digtal cameras in the past they should know this.
     
    Marketing is all going to need to change that at a very high cost for at least the first few months.
  • Pureview is not only the solution. Nokia had a few years ago a model named nokia n95 which had a 5mpx camera with carl zeiss optics. The difference beetween other 5mpx cameras on phones was the optics. I have now a htc 7 pro with 5mpx camera which came years after that nokia and it has a worse camera! I'm a photographer and i can judge the pictures right and know what optics (lenses) can make better on pictures. Maybe pureview has a good lens, but they selling it wrong with the 41mpx! Ads. They should show the specs more, which lens, the blend, aperture. Thats the specs where you can measure a phone camera from another. I've seen that already on the htc titan how they show to all which lens is used, and that's great.
  • TRUE its not the only solution and believe me that I know enough about camera optics etc. But the fact is that average Joe knows sweet F.A. about optics etc they look at big shiney numbers and 41megapixels will sell phones simple as that plus as you have already pointed out the optics play a huge part last time I checked Nokia were using very high quality lenses in the pureview. The point is at the mo WP needs a talking point for average Joe a reasons to consider it as such, and a Pureview Lumia would do just that.
  • People go by MP size not lens. Average consumers don't know the difference. Sad but it's true, the bigger the number the better they assume. Which is not the case. Although that purview camera is great. But I'm talking over all.
  • Your are right. But look at the reviews made for nokia lumia 900 for theyr decent camera. It was not good like it should be. That is not going to bring good sales if the picture quality is not good. I write a blog about windows phone and the queries which people come from search to my blogs are "which camera is better nokia lumia 900 htc one x" people look at reviews... And if we look at the whole lumia line it is great but the camera is not good. It may be due to microsoft and the hardware specs to the oems. But i say only that people want quality. Pureview is quality but till that we must wait on windows phones.
  • just want to chime in on this part
     
    the spec on the pureview, i believe, should be pretty good, but the problem is pureview itself is actually a method of combining pixels... i think a big billboard that explains pureview would be good
     
    btw, if u haven't already u might want to check out some of the shoot outs from CNet for pureview, i think the only issue the current gen had i the color is a bit greener than it should be, but other than that it is way sharper 
  • I think the majority would prefer a slim phone with a somewhat decent camera over a phone doubled in thickness with a great camera.
    At least I would.
  • Notice as well that gross margin (on smartphones) went from 15.6% last quarter to 1.7% this quarter so they are selling the phones at near cost.
     
    Is anyone outside of Apple and Samsung able to sell phones at decent margins?
  • At least on Sammy's side they're using a free os with generic casings which must help to reduce their costs. Nokia has to pay for the os and the cost of the case. Still, after boasting of having their biggest ad push and nokias so called rolling thunder the 900 numbers aren't that good. Maybe that's why ATT has cut back on their advertising.
  • Sammy has to pay Microsoft for every Android sold.  So, no, it is not a free OS.
  • Samsung also has supply chain economies of scale that only apple can match - that is helping in regards to margins.
  • @theefman...I believe there was an article on this site (or some site) that indicated that Nokia WP licenses were a 'wash' given that Microsoft is paying Nokia for Navteq and/or some of the Nokia IP/Services.
     
    Also, Operation Rolling Thunder is a Nokia initiative, which is independent of any advertising that ATT chooses to do for Nokia devices or any other devices on that network.
     
    Not sure how much more Nokia can advertise one device, on one carrier.  And do you really think that Operation Rolling Thunder ends with the Lumia 900?  The Lumia 900 was just the beginning.
     
    Rolling indicates perpetual, ongoing, progressive - there are more Lumia devices forthcoming, and additional carriers to be on board...Operation Rolling Thunder is hardly over.
     
    At the end of the day, while you may think the Lumia sales aren't good, the numbers exceed ATT and Nokia's expectations, and they clearly ursurped the combined sales of HTC/Samsung devices on ATT's  network.
  • I'd think a major reason they have cut back is that the phone has been out for three months, and there's something new exciting available now (in their eyes, at the least). Unfortunately, that says a lot about the difference in perception between the Lumia and the latest iPhone (which is older, of course).
  • Sounds like theeffman is going to give up on WP,quite a shame
  • Samsung has a huge production base and manufactures components for other companies which drives cost into the ground. Apple makes very few different products, but produces a ton of them. The mass production of just a few products drives the price way down. The fact that both companies are highly regarded by consumers doesn't hurt either.
  • im not sure if it's near cost, but the over-the-top marketting they've been doing is probably what's costing the most at the moment, i think once things pick up and they don't have to throw in that much money into marketting, the margin would probably be higher (don't get me wrong, they need these makertting stunts, and probably needs more of them for wp8, im just pointing out that if u don't count the marketting the margin might be alot higher than what it seems)
  • While it is 4 million worldwide, the number is far less in the US. Nokia still has significant work to be do.
  • For the record, I own an HTC Titan. When I bought it, I chose it over the Lumia 900 based solely on the 4.7 inch display. Now that I've seen what Nokia can bring to the table, combined with all of the negative comments in this thread, serve only to convince me that the next phone I buy will be made by Nokia running Win phone 8. Hand-roid and Eyecandyphone (lots of sugar, no substance) can suck hind teat. With few exceptions, every comment I read smacks of fear disguised as knowledgeable discussion.
  • @Rebel_Yell said:  "...every comment I read smacks of fear disguised as knowledgeable discussion".  You hit the nail on the head.  The Nokia hate (or envy) is astounding; Nokia put WP (via Lumia) on this lips of many, something that neither Microsoft or the other oems have managed to do. 
     
    I guess it was too much for me to expect that ALL WP fans would actually be happy about the exposure that Nokia brings to the platform.  Oh well....
  • Nokia is a sleeping giant, in my opinion. Regarding Nokia stock, correct me if I'm wrong but Warren Buffett said "...when everyone else is selling, that's when I buy." If it were possible, I'd buy every share I could find.
  • Let's just hope this is not the sleep that is a euphemism for 'dead' or 'will be dead soon.'
  • Yeah, I can't wait for my upgrade which will be a month after wp8 is released so I can get a Nokia phone. Also, its hard to believe that only 300 something thousand Nokia phones have been sold in America. I live in Chicago and I've noticed a few Nokia phones just on my public trans route. There are alot of people In Chicago let alone America. Going by those numbers I shouldn't have seen anybody with one.
  • the sold 600k.  The 300k was a lie made up by a hack "analyst"
  • this is what i think is happening
     
    Nokia is probably throwing alot of the marketting weight into big cities, like chicago and new york which is generating sales, but smaller areas (townships what not) probably hasn't seen much marketting at all which in turn makes general consumers unaware of the shiney L900 so they probably weren't selling at the same rate as the big cities
     
    and this is probably also why we get ppl saying they never see wp in the street and others saying they have seen it many times
  • Well I think that's pretty good. They doubled from last quarter. Its not too bad at all. Its just a good sign but we won't really know how this all would pan out until wp8. I think after Q1 2013 we will have a pretty good idea of how Nokias future will pan out. Im very optimistic
  • The stock market agrees with you. NOK is up 12%. However, Nokia also expects a loss in Q3 so it will be a bumpy ride.
  • would Q3 include WP8 numbers?
  • No. WP8 will be in Q4.
  • I am excited to see nokia's next line of WP. My next phone will be a Nokia...period
  • I wonder if its at all possible for Nokia to be paying for the negative press just to get ANY kind of buzz alive. It is not uncommon for a company to also use negative press to keep conversation about certain things engaging. While it may seem counter-intuitive, there is a psychology behind it...almost subliminal. Good or bad, they are being spoken of and with the Surface as an example, the bad press can bring out the passionate fan base as well. Like ME! #MakeMineWindowsPhone #Nokia #Lumia
  • Shipped phones tells us almost nothing--it's like saying you asked 50 girls out at the bar last night. Doesn't tell you how many laughed in your face. 
  • well, better than asking 1 and stop