Nokia back in the game as 4Q results top estimates

Nokia Corp.

Nokia Corp.

Nokia Corp. reported its smartphone numbers for the fourth quarter of 2012, stating that the results were beyond the company’s wildest dreams. The better-than-expected results were partly driven by the Nokia Corp.’s partnership with Microsoft Corp. The smartphone business is expected to get Nokia Corp. back on track, according to preliminary 4Q financial results announced by the Finnish company.

Nokia’s 4Q smartphone figures

On the 10th of January, Nokia Corp. announced surprisingly good news, namely profit. According to the company, which was once the No. 1 mobile player, sales of Lumia smartphones increased over 50 percent in the final quarter of 2012.  Nokia Corp. underlined that its Devices & Services division sold more than 86 million devices in the period, including approximately 4.5 million Lumia smartphones, while a net sales amounted to roughly €3.9 billion, beating the company’s wildest expectations.

Detailed data showed that Nokia Corp.’s smart devices, including Lumia smartphones, accounted for as much as €1.2 billion as the company sold more than 6.5 million units in the final three months of 2012. The company, however, underlined that sales of the lowered-priced Asha line and feature phones generated about €2.5 billion.

Stephen Elop, chief executive officer at Nokia Corp., welcomed the 4Q results, adding: “We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently, and Nokia Siemens Networks delivered yet another very good quarter.” As it was underlined by him, the company might even see a 2 percent profit. Analysts’ estimates expected a 10 percent loss.

The Finnish company is due to post its earnings on the 24th of January. But as it was underlined by the company the better-than-expected results were driven not only by the growing success of Lumia smartphones, but also by cost cuts and approximately €50 million in patent royalties.

Tough competition, tough times

Nokia Corp., which once was the world’s top mobile manufacturer, has been competing with well-known Apple Inc. and Samsung Electronics Co. For almost 15 years the Finnish company had led the market, yet it lost its ground in 2007 with the launch of the Apple Inc.’s iPhone. These days Nokia Corp. is far behind Samsung Electronics Co. and Apple Inc., the No.1 and No. 2 smartphone makers respectively. While Nokia Corp. was losing its market share, it decided to cooperate with Microsoft Corp. to produce a smartphone with Windows software as it hoped to attract new customers and win back the lost ground.

But the latest results show that Nokia Corp. is back in the game and might be heading in the right direction. The decision to shift from the old Symbian OS, which was much criticized at the time, is now bringing profits. Even though getting back on track has taken longer than initially expected, finally Nokia Corp.’s devices are finally more desired than its old Symbian OS-run products. And despite the fact that the margin is expected to be nearly minus 2 percent in the first three months of 2013, the overall future of the company is looking much better and colorful that at any point in the recent past.

Aubrey Chang
Aubrey Chang, Associate Editor Industry Leaders Magazine (www.industryleadersmagazine.com)

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