Nokia Sells 1 Million Lumia Phones, Reports Loss of $1.38B
Nokia's fourth-quarter 2011 earnings were a mixed bag, as the company announced it has sold over 1 million Lumia smartphones since launch and yet managed to swing to a $1.38 billion net loss.
A $1 billion loss attributed to the company's navigation division, coupled with the slumping average selling price (ASP) of its phones appeared to be at the root of Thursday's reported losses. The ASP on mobile devices overall was down 23 percent annually, while the ASP on smartphones dropped by 9 percent.
Net sales from the company's devices and services division totaled $7.88 billion, down from $11.1 billion in the same quarter last year. Operating profit for the division was down 72 percent to $383 million, from $1.34 billion in the fourth quarter of 2010.
Nokia shipped 19.6 million total smartphones for the quarter, off from 28.6 million a year ago. Total mobile phone shipments reached 93.9 million, down just a percentage point from the previous year. That compares to the 37 million iPhones Apple sold this quarter.
Nokia CEO Stephen Elop in a statement attributed lagging sales in part to changing market conditions that have put increased pressure on Symbian. "In certain markets, there has been an acceleration of the anticipated trend towards lower-priced smartphones with specifications that are different from Symbian's traditional strengths," Elop said, adding that Nokia now expects to sell fewer Symbian devices given its focus on Lumia smartphones.
There's been no resting on laurels at Nokia since Elop took over as CEO. Just six months after signing an agreement with Microsoft to license Windows Phone 7 (WP7), Nokia introduced its first two phones based on the platform, the Nokia Lumia 800 and the Nokia Lumia 710. Nokia also started its re-entry into the North American market earlier this month when T-Mobile started selling the Nokia Lumia 710 as a lead device. The company also announced the Lumia 900 with AT&T at this year's International CES.
Elop said the company is in the "heart" of its transition to Windows Phone 7, adding that there's still a lot to accomplish in 2012.
Nokia also today announced that board Chairman Jorma Ollila and Nokia board members Bengt Holmström and Per Karlsson will no longer be available to serve on the Nokia board after its annual general meeting. Ollila joined Nokia in 1985 and served as the president and CEO of the company from 1992-1999 and chairman and CEO from 1999-2006.
More specifics about Nokia's plans should be known by early next month. The company said it will hold a strategy and financial briefing at the Intercontinental Hotel in London on Feb. 11, when will focus on its medium to long-term strategic plans and objectives.
Shares of Nokia were up just under 4 percent to $5.47 in Thursday trading.