Nokia's Lumia shipments have hit an all-time high of 7.4 million, although that did not stop the Finnish smartphone maker posting an operating loss of Eu115m for its second quarter.
Nokia revealed its results for the three months to the end of June this morning, with net sales in its mobile division, dubbed devices and services, down 32% on 2012 to Eu2.72bn. Smartphone sales were flat on the previous quarter and down 24% on the same period last year to Eu1.16bn. Featurephones continued to outperform smartphones, with the division posting sales of Eu1.40bn, down 39% on 2012.
While Nokia will be heartened at Lumia sales hitting an all-time high of 7.4 million for the quarter, it is below the 10.2 million sales it posted a year ago, when it was still selling Symbian devices. The rise in Lumia sales appears to be down to aggressive pricing, with Lumia devices having an average selling price that was 18% lower than the previous quarter. The devices and services division posted an operating loss of Eu33m, an improvement on the Eu42m loss it made in Q1 and a marked turnaround on the Eu473m loss it posted a year ago.
Stephen Elop, Nokia CEO, said: 'We continue to focus on delivering meaningful differentiation to consumers around the world. We are very proud of the recent creations by our Lumia team, from the Lumia 520 – our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week.
'Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.'
Nokia's smartphone sales still fall behind those of its feature phone wing. It saw volumes fall by 4% to 53.7m units, but the manufacturer said turnover saw a slight recovery in the latter half of the quarter. The manufacturer said it was restructuring the feature phone arm to make it more innovative and competitive, with up to 440 jobs affected.
Nokia's operating loss included more than Eu400m of exceptional items, most caused by restructuring and divesting parts of Nokia Siemens Networks. On an underlying basis, it posted an operating profit of Eu303m, its fourth consecutive quarter in the black.
Looking ahead, Nokia said its devices and services wing would have an underlying operating margin of -2%, plus or minus four percentage points. While it said competition would continue to hit sales, it expected demand for high-end Lumia devices to increase.
More to follow
Author: Graeme Neill