Feeds

Nokia posts massive loss, blames 'ambiguity'

Horrific train crash at former world leader

The Essential Guide to IT Transformation

Nokia posted a large operating loss of €487m today, only its second quarterly loss in 19 years. And without the royalty settlement with Apple it would have been much worse: the settlement gifted Nokia a one-time bonus of €430m.

"Our new strategy introduced ambiguity," admitted CEO Stephen Elop. The figures tell a story of unit sales and margins both crashing dramatically.

Smartphone units fell 34 per cent year-on-year, from 25.2 million to 16.7 million; non-smartphone unit shipments fell from 85.8 million a year ago to 71.8 million in Q2 2011, down 16 per cent. Overall, phone sales were down 20 per cent from Q2 2010.

It means Nokia lost its smartphone lead, as predicted, falling to third position behind Apple and Samsung. Net sales fell by 11 per cent QoQ and were 7 per cent down from a year ago.

Nokia reported a negative margin of 4.5 per cent (+6.7 per cent on a non-IFRS basis), confirming it was paying people to take its phones away.

Elop also confirmed the exploration of a private equity deal for Nokia Siemens Networks. The division looked relatively perky, compared to the bloodbath at the rest of the company. NSN posted a lower loss than a year ago, with net sales up 20 per cent to €3.642.

Nokia accounted for the negative margins by explaining that the company had to shift inventory for its unwanted phones that had built up in Europe and China. Yet even with the "giveaways", unit shipments fell 23 per cent in Europe, 30 per cent in Asia-Pacific, and 34 per cent in China.

The company also recognised significant changes taking place in the quarter as Elop takes an axe to the bureaucracy. Nokia says it is aiming for break-even margins by the end of Q3.

Elop confirmed that the orphan N9 Linux phone will be "regional" only, and that volume shipments of Windows-based devices won't materialise until next year. ®

Boost IT visibility and business value

More from The Register

next story
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
Amazon says Hachette should lower ebook prices, pay authors more
Oh yeah ... and a 30% cut for Amazon to seal the deal
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
Feel free to BONK on the TUBE, says Transport for London
Plus: Almost NOBODY uses pay-by-bonk on buses - Visa
Twitch rich as Google flicks $1bn hitch switch, claims snitch
Gameplay streaming biz and search king refuse to deny fresh gobble rumors
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Backing up Big Data
Solving backup challenges and “protect everything from everywhere,” as we move into the era of big data management and the adoption of BYOD.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.