Feeds

Nokia earnings pain masks intact war chest, brewing counterattack

And don't forget the dumbphone sector either

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

Nokia reported another painful quarter today and warned of more to come. The Finnish phone giant reported sales were down 19 per cent year-on-year to €7.2bn for Q3, with an operating loss of €576m. On the positive side the war chest of net cash is unperturbed at €3.6bn, and Nokia's networks division and feature phones did well.

The cash pile is important, as it's going to need it. New Windows 8 Phone devices, which are a significant improvement on today's range and have been called Nokia's "first true Windows phones" are imminent. But Nokia won't book revenue from the new range until mid-way through Q4 - and only in selected markets. As a consequence, it's flushing out the channel inventory of its current Lumias at very low prices. Officially, shipments of Lumia phones dwindled to 2.9m, and the company reported an operating margin (non-IFRS) of -19.2 per cent (-7.4 per cent IFRS).

Sales of smartphones fell from 16.8m in the same quarter a year ago, to 6.3m. Devices revenue fell particularly in China, where the abandonment of Symbian meant sales fell off a cliff: down 78 per cent from €1.27bn to €278bn. Overall devices and services sales were down 34 per cent year on year and 11 per cent sequentially, or in constant currency 36 per cent and 13 per cent.

So, the only way is up?

The bright spot was strong sales of its Asha phones: feature phone sales grew by 3 per cent, and sales into Asia-Pacific continued to climb. Nokia can still compete in the sub-$100 market - one of the three targeted for improvement by CEO Stephen Elop in his 'Burning Platforms' memo - and the one everyone forgets about.

Much of Nokia's exceptional items came from the restructuring program, as it races to get costs in line with revenue. Nokia torched Symbian and what's left of Meego, resulting in phone R&D 21 per cent lower than a year ago. (Nokia also abandoned its Meltemi system this year, but since it hadn't ever officially announced Meltemi, it didn't feel obliged to record this death). The company recorded write-downs and charges of €654m, of which €454m was downsizing the phones division.

Microsoft continues to pump $250m into its key partner, Nokia confirmed.

You can find more gory details here - and judge whether you think Nokia's real comeback with our hands on, here.

A largely "and so?" response to Apple's iPhone 5 has encouraged Nokia. However it isn't really competing with Apple - rather it is up against the mass market of poorly differentiated Android devices, with one stand-out phone and a lot of pretty good ones. ®

Application security programs and practises

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
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
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
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.