Nokia has big write down coming in light of Windows Phone 8 launch

Nokia has big write down coming in light of Windows Phone 8 launch
As if Nokia didn't have enough reasons for stockholders to dump the stock, the Finnish based handset manufacturer might have to write down perhaps hundreds of thousands of Nokia Lumia handsets which the company will have trouble selling with the impending Windows Phone 8 launch. Nokia has also reduced orders to ODM Compal Communications for the Nokia Lumia handsets, which helped Compal's revenues drop 39.5% sequentially in June.

RDC Capital Analyst Mike Sue says he expects Nokia to write down Nokia Lumia units that won't sell with the more advanced Windows Phone 8 handsets soon to hit the stores. He sees the potential for Nokia to have to write down billions in inventory which should guarantee red ink on the company's bottom line for the entire year. Price cutting has worked well in the U.K. to stimulate sales as the Nokia Lumia has returned to iSwitch's Top Ten U.K. handsets in 8th place (above the 16GB Apple iPhone 4S and below the HTC One S). It was the phone's first appearance on the list since February.

Microsoft has already announced that existing Windows Phone models will not be updated to Windows Phone 8. The new OS will enable manufacturers to offer handsets powered by multi-core processors, higher resolution screens (720p) and microSD slots to name a few. Microsoft's updated mobile OS will allow phones running the software to better compete with Android models that now offer quad-core processors, HD displays and expandable memory.

Unsold inventory of Nokia Lumia phones could end up sold at extremely low prices, given away as an enticement to sign up for a specific data plan, sold to third party discounters or simply destroyed. Any revenue Nokia receives from selling the phones after a write off would be like found money as far as the company is concerned. Writing off such a large amount of handsets is often seen by investors as a bottom which is why shares sometimes soar on such news.

source: WMPoweruser

FEATURED VIDEO

23 Comments

1. djripster

Posts: 141; Member since: Dec 10, 2011

I wouldn't mind getting a free Lumia 900, why waste your stock Nokia :)

15. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Magic 8 Ball says a Lumia BOGO for $0.01 USD promo is in the offing - SOON....

2. alinda

Posts: 1; Member since: Jul 11, 2012

I want a free Lumia 900, gimme gimme!!

3. Joshing4fun

Posts: 1245; Member since: Aug 13, 2010

They should turn that extra stock into some sort of promo. Make lemonade Nokia!

4. andyboi_ph

Posts: 101; Member since: Mar 26, 2012

or when they cut-off the prices of existing LUMIA big-time, I might get one, the 800 or 900 model, i wouldn't mind using 7.8 version though

5. azafirster

Posts: 44; Member since: May 01, 2012

There you have it, CEO's nitwit decision to not give os upgrade to current phone litterally kills old stock.

10. harley22x

Posts: 9; Member since: Jul 11, 2012

The Lumia IS getting 7.8.... Apple does the same thing, and Android does with many phones. The old phones can't grow another processor core, or a high resolution screen, NFC technology, or an SD Card slot. Correct me if I am wrong, but I am pretty sure phones of today do not have those capabilities. So why have the full upgrade? 7.8 is most of the Software changes anyways, so what is the big deal?

14. Contreramanjaro

Posts: 153; Member since: Dec 04, 2011

The only upgrade I'd really want from WP8 in WP7.8 besides what is already given is IE10. That being said I think the support Microsoft is giving to it's WP7 models is quite good. Android Phones many times only get a couple upgrades then they are no longer important enough for a company. iOS devices of a certain age seem to struggle with the newer OSs such as 3GS with iOS 5 or a iPod Touch gen 2 with iOS 4.3. Also, people are entirely unaware of Windows Phone at all let alone the differences between 8 and 7.8. Go ask your typical iOS user which version of iOS they have and you, like me will get a blank stare followed by an "I don't know." If Apple announced it, it would be "look at everything the old iPhone gets, Apple is so great. You get even more stuff if you buy new hardware!" I mean, clearly the iPhone 4 didn't have the power to run Siri... right guys? Right?

6. residualhatred

Posts: 25; Member since: May 28, 2012

They need to send a few nokias to Virgin Mobile or one of the prepaid companies. There are few that would jump at a discounted lumia.

7. Mube1

Posts: 153; Member since: Sep 22, 2011

These feautres are already available on android last from 1 year, so what is new in window 8

12. harley22x

Posts: 9; Member since: Jul 11, 2012

Tight integration with applications, plus live tiles man. come on. Also, it is smooth as ever. Jelly Bean is smooth, but face it, Jelly Bean will come available on like 4 handsets out now, and no others will be upgraded. Such as phones still on Android 2.3 like myself who don't even get ICS. (LG Optimus 3D). But anyways, Windows Phone is fast and smooth with high security features. Stuff android is crucially missing.

16. kanagadeepan

Posts: 1265; Member since: Jan 24, 2012

Empty truck is always faster than fully-loaded truck... Plz don't compare SINGLE-Tasking OS or FAKE-Multi-Tasking OS to Android in smoothness...

20. Stoli89

Posts: 333; Member since: Jun 28, 2010

You sound like a former Symbian fan bashing IOS.

21. harley22x

Posts: 9; Member since: Jul 11, 2012

IOS is smooth as well. And android is finallly getting that fixed now. Your argument was completely invalid. But seriously, you would think that my phone, having a dual core, 512mb of dual channel memory with the latest update for my phone (2.3) it should be buttery smooth.... yeah, not the case. Android was having software problems with their smoothness, that is no question. Phones and tablets with quad cores were still lagging as well.

8. microsoftnokiawin

Posts: 1268; Member since: Mar 30, 2012

when will the board wake up and fire elop

9. plgladio

Posts: 314; Member since: Dec 05, 2011

Microsoft's way to acquire a company. They are keep on winning, I like one kick from Nokia to kill the contract with MS.

11. harley22x

Posts: 9; Member since: Jul 11, 2012

I would up and sell my LG Optimus 3D for a Lumia 900 any day.!

23. harley22x

Posts: 9; Member since: Jul 11, 2012

I don't even use the 3D on the thing. I liked my HD7 better because all I do is watch videos, email and text. This is my opinion and I am getting dislikes? Lol bunch of apple fanboys or android fanboys... holy.

13. lubba

Posts: 1313; Member since: Jan 17, 2011

Could have decent quarter. No, the phone people want have to be exclusive to ATT. Bad sales, bad marketing. Bad presentation. Not my problem. As long as HTC comes out with something hot for tmo this fall, I'm happy.

17. kanagadeepan

Posts: 1265; Member since: Jan 24, 2012

I also wan't one FREE Lumia900 WITHOUT a contract....

18. rizky_p

Posts: 19; Member since: Oct 29, 2011

I remembered eloop said a multicore smartphone is a waste of battery life considering that one of the feature of WP 8 is multi core, not so smart now eloop?

19. Stoli89

Posts: 333; Member since: Jun 28, 2010

Where did this author get his information? Write down billions in stock? Do you really think Nokia, as an alliance partner to MSFT and clear visibility at the highest levels to the OS plan, would expose itself to such a write-down. Do you think Nokia has at least one supply chain planner in its entire company? Sure, Nokia may have reduced orders for current Lumia's in favor if replacing with the next wave of new products and yes, there will likely be a dip in the current sales trend during this transition...but to say that 7.8 Lumias will have no market around the globe is, well, BS.

22. Penny

Posts: 1859; Member since: Feb 04, 2011

It also does not inspire much confidence when an article starts with "As if Nokia didn't have enough reasons for stockholders to dump the stock..." and ends with "...which is why shares sometimes soar on such news." Make up your mind or drop one of the two statements (HINT: I'd drop the hook instead of the one you think is actually true).

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.