Feeds

Nokia posts massive loss, blames 'ambiguity'

Horrific train crash at former world leader

Mobile application security vulnerability report

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. ®

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Chips are down at Broadcom: Thousands of workers laid off
Cellphone baseband device biz shuttered
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

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.