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back to article Nokia: OK, Q1 has been weak, but there's 'underlying' profit

Nokia warned of a weaker first quarter last year and duly delivered. Sales were €5.85bn in Q1 2013 with an operating loss of €150m. Net phone sales were down 32 per cent year on year, with 6.1 million smartphones shifted in the first three months of the year, of which 5.6 million were Lumia Windows phones. In Q4 Nokia shifted …

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No doubt Eadon will have his own take on it.

Lumia handsets seem to be shifting fairly well. The question is can they keep up the momentum and continue to ramp up sales.

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@Spoddy

I feel that if Microsoft allowed its hardware developers a little more flexibility when it comes to designing the phones, they'd be a lot more successful. A WP8 with a good, solid keyboard would be delightful - think 9300 or 9210 with WP8.

As for Eadon, everyone knows he has his own unique keyboard that he uses for posting on here. It comprises of two very large keys - one saying "Microsoft", the other saying "Fail" and he repeatedly slams his face onto it before clicking the "Submit" button.

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Re: @Spoddy

If Microsoft - or Nokia, I'm not sure - didn't keep lumbering developers with ridiculous limitations - the 920 has a perfectly functional FM subsystem, but it's disabled, which removes it from my potential upgrades - if the WiFi didn't switch off on lock (the expensive cellular data keeps going, I notice), if blocking could be enable, if the old Nokia idea of timed profiles could be implemented, and so on.

I look at Androids - hell, even iPhones, which are regarded as lacking innovation these days - and see so much more.

Ah well, I tried...

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Re: @Spoddy

FM Radio will be enabled in the PR2.0 update, due shortly; along with double-tap the screen to unlock and a fixed clock display even when locked...among other things.

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Re: @Spoddy

I'll believe that when I see it - remember the promises about the 7.8 update which turned out to be false.

Also, it's been shown on the internet that the WiFi can be left going on lock - lumias in the Chinese market appear to have this, so it appears a marketing decision.

Nah - actions, or in this case, inactions, speak far louder than words

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Thumb Up

@Thomas 4 Thank you for that image..............

......."As for Eadon, everyone knows he has his own unique keyboard that he uses for posting on here. It comprises of two very large keys - one saying "Microsoft", the other saying "Fail" and he repeatedly slams his face onto it before clicking the "Submit" button."

It gave me the best laugh I have had for while. The thought of you know who delivering his postings by head-butting his keyboard is absolutely irresistible. It may even be true LOL!

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Re: @Spoddy

As mentioned FM radio is enabled in PR2.0 firmware which is due July time I believe.

WiFi on when locked was out in the latest release on WP8.

Not before time (on both bits!) in my opinion.

Although I am the owner of an 920 which I'm rather pleased with still.

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Re: @Spoddy

Actually the WiFi under the lock screen was fixed it the Portico update (about 2 months ago) and the PR2.0 is a Nokia firmware update rather than an MS update. This means that it should definitely do what is suggested although I'm not sure on the always on clock thing, that may only apply to AMOLED phones.

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Facepalm

And here's the statement had Nokia done the right thing

Record Android sales rocketed Nokias profits to their highest ever this year as they matched Samsung neck and neck for market share. CEO Andy Rubin commented "Our hardware excellence rewarded our loyal customers once again by allowing us to offer exactly what they wanted, with a wide range of Android handsets from the budget models aimed at emerging economies right up to our latest 6.5' MegaPhone range. Sales of our Android tablets are performing extremely well too, with their overall share set to overtake the iPad this year as happened with Android handsets a few years ago. Our extension into Smart Eyewear is also creating a huge buzz , but that's what you'd expect from the best R&D facility in the business, which has been taking on staff year-on year since the Android decision at a rate of 15% pa, as well as building more factories. I shudder to think what state Nokia would be in today had we not given our customers what they wanted, and gone with Android".

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Re: @Thomas 4 Thank you for that image..............

Eadon is the Wesley Willis of El Reg...

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Re: @Spoddy

@Thomas 4: if Microsoft allowed its hardware developers a little more flexibility when it comes to designing the phones, they'd be a lot more successful.

WP achieves some remarkable things. It is crisp and fast, and gets good battery life, and achieves that on cheap hardware. In fact, out of Android, iOS and WP, WP achieves the best results with the least hardware. And it is also very stable for a newly released OS.

But this comes at a price. The API's are so locked down it's hard to achieve anything that Microsoft plan for you to do. Yeah, it means the app writers have far less opportunities to drain the battery or compromise the system, but it also means if you want to write the some unusual app that needs to do stuff in the background - you are out of luck.

All old the WinCE stuff I've used was about as stable as jelly in an oven. Yet WP7, which was WinCE based, is solid as a rock. The reason WinCE was so bad is it isn't open source, so when your driver or hardware went wrong it disappeared up into it's own digital arse into a binary blob Microsoft never allowed you to see, leaving the OEM without a clue what happened. With WP7 Microsoft fixed that by ensuring no one but them was allowed to design the electronics or write a drivers for it. So that means there will be no Samsung style double sensor touch screens, or any other hardware device until Microsoft has put it into one of their reference designs and written drivers to support it.

So you end up with a fast, stable, power sipping OS & hardware combination that does what it's designers planned and nothing more. For people who like their things stable and familiar I'm sure it works a treat.

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eadon ! Eadon ! EADON !!

Has anyone seen Eadon ?

Seriously, I'm getting a bit worried now, is it time to start sending out search parties ?

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FAIL

sigh

The anti-Eadon posters cause me much more mental anguish than Eadon himself. Indeed, I think I read an anti-Eadon post before I even read one of Eadon's own posts. Why must he be referenced in the first comment? If you have to respond to him, at least wait until he makes an appearance.

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Well they lost a sale from me because of the Exclusive EE.....Rarr.

That being said, I really like mt HTC 8X.

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Surprising. WP is getting worse (or at least showing how is it lacking in every possible way except general design) with every major update and people are buying it more? Or did they earn more because of the (proper Nokia) Symbian phones?

Well, I guess curiosity got the better of the people.

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FAIL

Wonderfully incisive comment there. As a WP8 user I directly notice repeated improvements, that's not to say it's perfect or without its own foibles.

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Why, I'm sorry, as a WP8 user (and even using it on the designated flagship with number 920) I have to say that it's the worst OS I've ever used, and I've used Windows Mobile 5/6, Symbian S40/S60, Maemo and Meego. Then I wanted to try out the modern "smart"phone idea - except I wanted to avoid tightly closed system like Apple and I don't trust Google (whose phones are mostly cheap trash anyway). But of course you already know that WP8 is very much like iOS, possibly even worse.

The improvements you speak of are slowly getting the OS on the level of Symbian 10 years ago. Is being better than a 10 years old OS too much to expect from an OS that I'm actually paying? Is it too much to expect that it would be better than Windows Mobile 5? That's 8 years ago. By Microsoft. I'm using Pocket LOOX N560 till this day and I still love the OS.

The improvements you speak of are so minor and so slow that the OS will maybe, just maybe, be on an "OK" level ( as far as I'm concerned anyway) by the end of 2018. But it's more likely that it will further close in and try to steal my private data more persistently.

I'm sorry if this looks like an anti-MS crusade, but that's how I feel after using Lumia 920 for two months.

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Anonymous Coward

I have a Lumia 920 on Orange, and its by far the best handset and OS I have ever used. Far more responsive and stable than any Android system, and nicer to use than IOS. The social network and address book / calendar integration is awesome, and the maps / nav are so much better than on any other platform. The 920 also still has the best camera and touch screen on any smartphone even 6 momths after launch - even beats the new Samsung S4.

The only issue I encountered was lack of apps, but that has now ceased to be a problem - everything I wanted has now been ported or announced.

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See, these are the things I personally don't care about or that are irrelevant. Yes, it's pretty and fluent, I'll give it that and I've been saying so ever since. It's frozen on me twice so far, don't know how Android or iOS fare and I don't care. I was comparing it mainly to Symbian and Windows Mobile. Social network integration and contactlist / calendar siphoning to cloud is completely unacceptable for me, not awesome. Maps are Nokia's work, of course they're good in it, they've been doing maps for cellphones for a while. Not relevant. Same with the hardware points. I actually bought the phone mainly because of the hardware hoping WP8 would be not-terrible. Oh well.

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Mushroom

So, to resume

What previously ran like clockwork, their manufacturing plants and supply chains, now don't.

There's very little interest in WP phones. They've decided only way to get people interested in WP is dropping the price down to featurephone price which is cheaper than the Symbian phones that are being phased out.

Series 40 phones have been moved from the featurephone category to smartphone category to give some semblance of success in smartphone sales because WP's aren't successful.

The ship is indeed stable, at the bottom of the sea.

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Re: So, to resume

Very little interest? Well, 25% more interest than last quarter apparently. Nokia's strength is solid, affordable hardware, and it's better for them to focus on value, especially in emerging markets, than trying to compete for digital jewellery. So I don't agree it's a race to the bottom and, as Apple's recent performance shows, more people now realise you don't have to spend £500 to own a decent communications device.

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FAIL

Weak? Their most profitable business is tanking!

Feature phone sales are down 30% (this is the only Nokia phone business that is profitable - for now).

The Chinese market has collapsed (down 56% year-on-year), Africa is down 32% y/y and Latin America is down 24% y/y.

The cheap Android phones that are swamping these markets, particularly Brazil, are clearly having an effect on Nokia's bottom line. Even reducing the Feature Phone ASP by 15% (ie. cutting prices) hasn't altered the dramatic decline in sales.

How will Nokia respond? With bargain basement Lumias? When it has to pay Microsoft $15 a device? Yeah, righto, that's going to succeed.

Even North America isn't interested in Lumias - during Q1, Nokia managed to shift only 400,000 devices (presumably all Lumias) in NA. That is a pitiful figure for what is Windows Phones home market.

Samsung shifted 61mn smartphones in Q1, this is more than all Nokia phones (of all types) combined. Just where would Nokia have been if they'd gone for Android instead of Windows Phone?

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Joke

Re: Weak? Their most profitable business is tanking!

Indeed Nokia does not sell as many smartphones as the market leader, Samsung. Perhaps Nokia should employ people to comment about technical failures with their S4's and point them to Nokia instead.

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Re: Weak? Their most profitable business is tanking!

>Feature phone sales are down 30%

But that is probably due to the 5 million Asha full touch Series 40 phone sales being categorised as "smartphones".

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Re: Weak? Their most profitable business is tanking!

. But that is probably due to the 5 million Asha full touch Series 40 phone sales being categorised as "smartphones".

Which is not reflected in the sales of 6.1 million smartphone sales.

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Re: 5 million ... not reflected in the sales of 6.1 million

I assumed that was a typo, and should have been 0.5 million.

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Anonymous Coward

a massive operations fuck-up caused by a shortage of components

Anyone in the industry knows that's a smokescreen to cover bad news.

Lumias are being made, but not being sold (when was the last time you saw anyone with one??). Warehouse stocks are filling up, backrooms are filling up, stores can shift them for love or money.

Nokia are well past last chance saloon, which is a shame, as they could have been competing right in the Android mix had their path not been determined by the ex-Microsoft bloke leading them...

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Re: a massive operations fuck-up caused by a shortage of components

When I was down on the smoke last month I saw a few windows phones, which surprised me as I thought I was about the only person with one. I have just changed from winpho7 to 8, but my new phone is not a Nokia. Echoing a post above I wish there was a winpho with a keyboard. I had an HTC 7pro when winpho first appeared and it was great. I don't get on so well with onscreen keyboards whereas I used to be able take my 7 pro as my only device when travelling to meetings as it was more than good enough for taking extended notes in meetings.

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Re: a massive operations fuck-up caused by a shortage of components

Anyone in the industry knows that's a smokescreen to cover bad news.

Agreed -- it's only made more obvious by the next line:

...which meant it was unable to capitalise on the interest generated by Windows 8 ...

It'd have been more accurately written as:

...which meant it was unable to counter the collective sigh of non-interest generated by Windows 8 ...

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Alien

Re: a massive operations fuck-up caused by a shortage of components

the only ones i have seen are those which the mobile providers are providing for free as upgrades to people on contract. and a civil servant whose department had all their blackberries replaced by winphone devices.

i've set up one of these and it was a horrible horrible device. the user has since smashed it with a hammer he hated it so much.

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@AC 15:16

Absolutely. In fact it's better than that, they did it deliberately - saw the woeful figures, halved their component orders and then bleated 'Look! Our phones are so successful they've sold out and look at all these people who want them!'

I'd only disagree on one point. Elop is most clearly not ex-Microsoft...

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Windows

Re: a massive operations fuck-up caused by a shortage of components

Dunno...may be true.Remember Philips totally lost their market many years ago. They single-sourced one vital part, and the factory making it burnt down. Bye bye Philips GSM.

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Anonymous Coward

Re: a massive operations fuck-up caused by a shortage of components

"and a civil servant whose department had all their blackberries replaced by winphone devices."

This is a massive future for Nokia. Windows Phone is far more secure than Android and IOS, and many companies are dying to ditch their Blackberry BES server boat anchors - and the £5 a month Blackberry tax - and Microsoft provide the full management stack at no extra cost via Exchange and SCCM - which the vast majority of enterprises already have....

I can see a large chunk of the current 76 million Blackberry users headed to Windows Phone as the Blackberry ship continues to sink.

Windows Phone is already outselling Blackberry nearly 6:1 in the US (4.1% versus 0.7%)

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(when was the last time you saw anyone with one??)

I'm pretty sure I've seen a few. But far less than N8s. (even though they've not been sold new for a couple of years). And I see far far more BlackBerrys than WinPhones, far far more that the quoted figures suggest.

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Anonymous Coward

Python

I cannot decide if the best fit to Nokia is:

1) "I'm not dead yet!"

2) "It's just pinin' for the fjords"

3) "It's just a flesh wound!"

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Joke

Re: Python

For Symbian diehards who may not know, that's the new Python interpreter included by default on Lumias.

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Nokia was Going to Die with Symbian

Market share was tanking before the 'burning platforms' memo. Everyone was going iPhone, Android or Blackberry by the end of 2010. In western Europe, Nokia smartphones were already rare. They had no choice but to kill it. Meego might have worked, but it would have been an extraordinary risk.

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Re: Nokia was Going to Die with Symbian

>> Market share was tanking before the 'burning platforms' memo. Everyone was going iPhone, Android or Blackberry by the end of 2010

That's partly true. Symbian is/was an outdated OS, however, Nokia's partners (carriers/networks) only really abandoned Symbian when Elop made that idiotic statement. Nokia should have had the tenacity to stick with the Meego platform, rather than jumping ship to a dead on arrival like Windows Phone. In fact, had Nokia concurrently developed Meego while also adopting Android (and perhaps WP as well), it would be in a far better position today. Instead it put all its eggs in the Microsoft basket. A disastrous move, and one that will likely end up killing it. But then again, that could of been the Stephen 'The Trojan Horse' Elop's and Microsoft's plan from the beginning.

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Re: Nokia was Going to Die with Symbian

Symbian was way ahead of its time.

Had the advantage that there was a high barrier to getting anything to work at all which meant the apps that were available were decent.

Battery life wasn't sacrificed. You could still get apps to do whatever was reasonable for a phone to do.

The problem was Nokia tried to keep the UI like series 40 for too long. (It could fairly easily be changed and it was look at Symbian Belle which in reality looked pretty similar to Froyo but worked far better.)

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Re: Nokia was Going to Die with Symbian

True.

Elop is just doing in more humanely by administering the cocktail known as WP8.

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Anonymous Coward

Re: Nokia was Going to Die with Symbian

I guess you think Forbes are on crack then.

"...Nokia believes that developing Android phones would be a drain on its limited resources, which can be put to much better use if it remains focused on a single platform.

"We find it hard to ignore the logic behind Nokia’s argument. Going with Android would have put Nokia in direct competition with not only Samsung and HTC, but also Sony, LG and a horde of handset manufacturers in the emerging markets. It would have entered the Android fray a little too late, struggling not only to differentiate itself from the crowd, but also against the marketing might of Samsung..."

http://www.forbes.com/sites/greatspeculations/2013/04/12/nokias-bet-on-windows-phone-looks-like-a-good-one-so-far/

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In western Europe, Nokia smartphones were already rare

Total crap. N8s were everywhere. They are still reasonably common. (Though anyone I know who has upgraded from one, has moved to an S3)

All Nokia needed to do was smooth the rough edges on the OS.

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FAIL

I've heard that the return rates are very high with Windows Phones, including the Lumia line. Not only that but Nokia only shifted 400k in North America where the margins are the highest. So in order for Nokia to shift that number of Lumia's, it's offering massive massive discounts just to shift the stock.

The Asha 'feature phone pretending to be a smart phone' line will likely sell much better than WP8.

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Judging by the prices, they should call Lumia a feature phone

Lumia average sales price is €182. Symbian ASP is €290.

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Re: Judging by the prices, they should call Lumia a feature phone

I think the only one they released remotely recently was the 42Mp camera one.

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The Asha 'feature phone pretending to be a smart phone' line will likely sell much better than WP8.

There's no "likely" about it - the Asha in three quarters has outsold the Lumia that has been available for 6 quarters (Asha: 20.5m in 3Qs vs. Lumia: 19.5m in 6Qs).

But then, the Asha is a high-volume/low margin product whereas the Lumia is a low volume/high... err...oh dear... let me start again, the Lumia is a low volume/low (if not negative) margin product...

And the Asha star is also rapidly waning, meaning that Nokia are now royally farked. Of course a budget Android device would sell like hot cakes, but that just isn't going happen while Ballmer is pulling the strings.

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Anonymous Coward

"I've heard that the return rates are very high with Windows Phones"

Substantially lower than with other platforms, but high for Nokia who have historically had an incredibly low return rate...

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OK how many of you smartphone users actually use apps bespoke to that device? Sure you might occasionally use the popular ISS tracker, or the what's in my cupboard app but usually you use a core set of apps that are available cross-platform.

After using an iPhone and ditching it and never taken to liking an android I decided to get a lumia.

It's a great phone, and definitely not worth the drubbing that it gets in the comments. I just think it's marketed wrong.

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Snap

Couldn't agree more, mirrors my sentiments entirely.

As usual with Microsoft the marketing has been poor. Can't say the Lumia's are amazing, but they are very capable, solid and affordable handset.

WP is getting the few core apps, mainly games, that the other two giants have, and I'd love more customizable autocorrect but otherwise it's a pretty solid platform.

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Re: Snap

Main thing for me is it is actually built properly. (I have had a few similar price Android devices that have fallen to bits within 6 months but after about the same amount of time my Lumia is still just great).

I have a Xoom as well (That is built properly as well and is easy to taker to bits to repair if necessary). That is over a year old.

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