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Nokia sold over 2 million Lumias in Q1, lowers outlook as margins evaporate

Posted: , by Victor H.

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Nokia sold over 2 million Lumias in Q1, lowers outlook as margins evaporate
The first Nokia Windows Phone sales numbers are in: Nokia sold more than 2 million units of its newly launched Lumia series in the first quarter of 2012 for an average selling price of approximately $288 (220 euro). That however was not enough as competition waned it out of India, the Middle East, Africa and China, and gross margins evaporated for Nokia smartphones.

What’s shocking is the catastrophic overall slump in unit sales - Nokia sold only 83 million cell phones in total in Q1. That’s an unprecedented drop and clearly the biggeset we’ve seen in the industry ever - the figure is nearly 27% down compared to total sales of 113.5 million phones in Q4 2011. Smartphone sales are down 50% year-on-year.

This could well mean that Nokia is no longer the biggest phone maker as of Q1, topped by Samsung.

Nokia CEO Stephen Elop admitted that the results were "disappointing":

"Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition," Elop explained. "Within our Smart Devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success. Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States."

At the same time, particularly troubling is the drop in operating margin. In the first quarter, Nokia admitted operating margins fell to minus 3%, lower than the expected

And it’s only going to get worse in Q2 2012. Nokia projects an equal or worse second quarter citing the very same competitive factors. In a conference call right after the announcement, Elop explained that Android is expanding quicker than expected in the ultra low end, and white box Chinese manufacturers are pushing Nokia in developing markets. At the same time, the Finns don't have a high-end touchscreen feature phone, a segment dominated by phones like the Samsung Star and that's another issue the company recognizes.

In response, Nokia is trying to ramp up Windows Phone sales. The Nokia chief executive mentioned that Lumia 710 sales on T-Mobile exceeded expectations and the company was "very pleased with the initial response" to the Lumia 900.

Nokia stock is sinking at the moment in pre-market trading, down by the massive 17% so far at $4.15 a share.

source: Nokia

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posted on 11 Apr 2012, 07:45 21

1. SuperAndroidEvo (Posts: 4847; Member since: 15 Apr 2011)

There it is, the start of Nokia's rebound. This is the beginning of the WP resurgence! WP is going to be a strong player in 2012!

posted on 11 Apr 2012, 07:51 8

4. SuperAndroidEvo (Posts: 4847; Member since: 15 Apr 2011)

See it starts somewhere & it will only continue to get better. 2 million is not overly huge but it is a start & better than what both Nokia & WP have done in the recent past. Keep moving foward Nokia & WP, I can't wait to see what is in store for Windows 8 & WP8!

posted on 11 Apr 2012, 08:09 13

9. remixfa (Posts: 14255; Member since: 19 Dec 2008)

you have to put it in perspective.

The city must burn to ashes before it can be rebuilt. that is what nokia is doing now. There will be more bad news before it gets better. They know its coming though.

2 million sales is phenomenal when you consider its mostly 710's that are sold and Tmobile is the smallest of the big 4 american carriers. The only other phones that get those sorts of numbers on Tmobile are samsung galaxy devices.

I told you guys the 710's were selling extremely well. :)

posted on 11 Apr 2012, 08:20 4

13. robinrisk (unregistered)

Arent those worldwide numbers?

I Seriously doubt T-Mobile had too much of an impact on there, specially with the marketing efforts in europe.

posted on 11 Apr 2012, 08:29 6

16. remixfa (Posts: 14255; Member since: 19 Dec 2008)

the 710 sold way more than the 800. The ONLY launch of the 710 was in Tmobile USA, which is also where they put the most money into advertisement. Yes, a lot of those numbers are coming from Tmobile. Ive been saying for the past 2 months how well the phone has been selling, and this is just the proof.

Nokia is trying really hard to put themselves back into the american market, so that is where they are focusing all their money.

posted on 11 Apr 2012, 08:46 4

20. Ray.S (Posts: 332; Member since: 19 Jul 2011)

The 710 is sold worldwide.

posted on 11 Apr 2012, 08:48 3

21. remixfa (Posts: 14255; Member since: 19 Dec 2008)

im sorry, i meant to say "the only US launch was in Tmobile". my faux pas.

posted on 11 Apr 2012, 09:16 5

30. snowgator (Posts: 3596; Member since: 19 Jan 2011)

I was so expecting to have the new "WP/Nokia Bashers" that have popped up on PA to be the first posters, just attacking these numbers with no perspective on what Nokia and WP are trying to do. S.A.E., remixfa: Ya'll rock like you are turned up to 11!!

Thanks for the level headed eval on these numbers. Both WP and Nokia have a ways to go, but these are the best numbers I think they could have hoped for with only 2 mid and lower tier devices out in only half the markets they are shooting for. Let's see how Tango performs in developing markets, the 900/910 launches go, and see how Nokia, HTC, Samsung, Fujitsu, ZTE, and LG do with WP8 in Q4. By this time next year, we will know the future of Microsoft's attempt to redefine itself in the Tablet/Smartphone world.

posted on 11 Apr 2012, 09:22 5

31. remixfa (Posts: 14255; Member since: 19 Dec 2008)

I agree. I think the real challenge is after the WP8/apollo launch when they start diving into the high end and go after android and iOS at the top of the pile. Thats when its going to get really interesting... especially if desktop mode works great for the tablets. gimmie!

posted on 11 Apr 2012, 11:42 5

65. SuperAndroidEvo (Posts: 4847; Member since: 15 Apr 2011)

Yeah 2 million means there is DEFINITELY some interest in Nokia & the WP platform. I agree with remixfa, it's probably going to get a little bit worse but at least the ball is rolling.

Once those other companies start to crank out their WP's, the platform will see significant changes. I believe those changes will be for the better.

Look let’s face it Nokia hasn't sold much but these 2 million units are definitely a welcome sight to the company. Windows 8 & WP8 will definitely help boost those numbers into the right direction. I for one am VERY excited to see what else Microsoft has in store.

We know Nokia makes a sexy phone, now the ball is on Microsoft to make a sexy OS. WP7.5 is in the right direction but we need a whole lot more. WP8 might be what the Dr. ordered!

posted on 11 Apr 2012, 12:09 5

69. hepresearch (unregistered)

The first of my acquaintences to buy a Windows Phone, well, just did. He got a Nokia Lumia 710 on T-Mobile, and he let me play with the thing during a long road trip yesterday. It is REALLY nice! I was most pleased... now we just need Elop to stop saying crap like that he is "disappointed" or that Nokia is "still in transition" and "weakened". Yeah, he needs to quit putting the weak face on everything if Nokia is to start looking strong again from the top down... however, I worry that it is all just a bit too orchestrated to be random weakness and stupidity on Elop's part.

posted on 11 Apr 2012, 09:23 2

33. darac (Posts: 2156; Member since: 17 Oct 2011)

Have you even read the article?!?!

Nokia is having a free drop, record losses, with an extremely grim forecast for the rest of the year.
2 million lumias is a worldwide number, and it's a pitiful one.
Compare that with Samsung who will sell 45 million android phones in the same quarter.

posted on 11 Apr 2012, 09:34 3

37. darac (Posts: 2156; Member since: 17 Oct 2011)

..correction, that'll be around 35-37 million android phones.

posted on 11 Apr 2012, 10:31 3

56. SuperAndroidEvo (Posts: 4847; Member since: 15 Apr 2011)

Yes but you have to take baby steps before you become something BIG. I see this as a positive for both Nokia & WP. Hopefully this keeps the snowball moving.

Remember you move a snowball & it keeps getting bigger and bigger.

This reminds me of when the G1 came out on T-Mobile. It was small at first but then it catapulted Android into the mainstream.

posted on 11 Apr 2012, 07:45 4

2. pongkie (Posts: 572; Member since: 20 Aug 2011)

wow congrats nokia & MS

posted on 11 Apr 2012, 07:50 7

3. vishalvenky (Posts: 67; Member since: 12 Feb 2012)

within 2014 Nokia will be the top company.. MS give everything u have to apollo..

posted on 11 Apr 2012, 07:54 3

5. SuperAndroidEvo (Posts: 4847; Member since: 15 Apr 2011)

I really can see that happening. There is so much potential in both Nokia & WP!

+1 to you!

posted on 11 Apr 2012, 08:01

6. rycx365 (Posts: 37; Member since: 18 Mar 2011)

What's stopping Nokia from releasing latest phones with high end specs like other manufacturers?(e.g. Samsung, lg, htc, apple...) I bet if Nokia could release a quad core device with specs on par with the upcoming gs3, Nokia would be raking in the millions

posted on 11 Apr 2012, 08:03 7

7. Victor.H (Posts: 658; Member since: 27 May 2011)

Windows Phone doesn't support those high-end solutions at the moment.

posted on 11 Apr 2012, 08:08 2

8. rycx365 (Posts: 37; Member since: 18 Mar 2011)

Yeah... That's true. But I feel that in order to stay competitive, wp should support the latest technology. Having simply a smooth ui with no lag will not win the consumers over. People want speed and performance

posted on 11 Apr 2012, 08:12 4

10. remixfa (Posts: 14255; Member since: 19 Dec 2008)


all that you want is coming with the Apollo/WP8 update this year. The rise of dual core/quad core, and the ultra high end comes with Apollo. With that will also come a substantial rise in profit margins for WP7 handsets.

If people wanted more than a smooth UI, no lag, and an easy to use interface, the iphone would never have been a success.

WP7 went after the mid and low range first because there is much less competition which means it would be easier to gain market share. Dont worry though, im sure the yet to be named samsung/nokia/HTC dual and quadcore WP8 phones will not disappoint.

posted on 11 Apr 2012, 08:17 5

12. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

WP is adapting to slowly. Apple can afford being slow, they have religion. On the other hand, Droids have specs. WP doesn't have anything of it. The "smooth-UI-thing" is Apple's story, and there is no "mental" space for WP.

posted on 11 Apr 2012, 13:29

85. -box- (Posts: 3991; Member since: 04 Jan 2012)

Considering it's just over a year old, I'd say it's making some considerable progress... It's an all new OS, didn't share the bones of an old OS and takes its shortcomings. It'll get there, just wait and see.

i'm using a Lumia 900 and I also use an HTC Sensation 4G. The Lumia is faster for every task, and I haven't noticed the absence of Flash all that much, and I am so amazingly satisfied with the Internet Explorer browser. The Sensation seems to be taking better overall photos for what I've tested so far, which is disappointing given the Carl Zeiss optics of the Lumia. The Lumia has much better battery life and feels so much /better/. Overall, it's great.

I have a WP7 emulator (launcher, in essence) on the Sensation, and it doesn't do the OS justice.

My biggest complaint with the Lumia is that the availability of apps I was familiar with on Android aren't commonly available on WP, and those that are tend to be priced a bit higher. I've never yet paid for an app, so I'm trying to find free alternatives so I can sell the Sensation, as it's become frustratingly chaotic recently

Don't get me wrong, I still like the Sensation, it's just not as satisfying as it used to be. Next Android device I'll get will be just a media player, like the Galaxy Player or Sony Walkman. However, I'm more likely to purchase an 808 PureView than the media player

posted on 11 Apr 2012, 14:30

87. lubba (Posts: 1313; Member since: 17 Jan 2011)

I thought WP already have speed and performance. I think it's more like people want NUMBERS and POPULARITY. If numbers and popularity are low, they don't want it. People don't research before they buy. They let others tell them what to do. Bought a Vizio flat screen 46" 3D tv dirt cheap at WalMart. Worth every penny. Will never buy from any other. Did my research too! Alot of stupid people out there, ALOT!

posted on 11 Apr 2012, 08:21 2

14. strikercho (banned) (Posts: 156; Member since: 20 Mar 2012)

Actually WP does not need high specs. It is just much more efficient than Android. Lumia 900 with a single core runs just as smooth as iPhone 4S and MUCH better that dual and quad-core Android phones.

posted on 11 Apr 2012, 08:26 3

15. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

World is divided in two camps: those who praise specs and those who praise smoothness. BUT, the latter is only valid when it comes to Apple. Everything outside of Apple must be in the other camp - where Andorid is. So, WP is outside of this camps and that's why it will fail. Real benefits don't matter, only ideologies. And they don't know that in Microsoft and Nokia, unfortunately.

posted on 11 Apr 2012, 08:31 6

17. remixfa (Posts: 14255; Member since: 19 Dec 2008)

thats not true at all. its not "one or the other". if you want smoothness, you dont automatically run to apple. many people like myself are very put off by apple's disgusting culture and work ethics and would never buy them. so, apple is not even on the table.. which leaves WP7 or Android.
Most people are not invested in ANY OS and thus are willing to try any of them.

MS and Nokia are 2 of the most well known and beloved brands in the world. Them coming together was a move of genius. To think neither one of them has a massive following of devoted fans is just rediculous. It may not be as blindly cool aid drinking as apple nuts, but they definitely both have strong followings.

posted on 11 Apr 2012, 08:35 5

18. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

Your are wrong about the people, but let the practice of Nokia's end prove that...

posted on 11 Apr 2012, 08:49 6

22. remixfa (Posts: 14255; Member since: 19 Dec 2008)

dude, i work in the industry, im very aware of how UNcommited most people are to an OS.

Im not gonna sit here and argue about it. lol.

posted on 11 Apr 2012, 08:59 3

26. AppleConspiracy (Posts: 637; Member since: 18 Oct 2011)

I thought I was qualified for something as an MA in industrial design and Ph.D in social sciences who writes a book on Apple, however obviously you have more credibility becuse you work "in the industry".

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