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Nokia back in profit thanks to Lumia smartphones

by Mark Tyson on 24 January 2013, 15:45

Tags: Nokia (NYSE:NOK), Windows Phone, PC

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In more financial news (and Microsoft is also due to report this evening) we have just seen Nokia’s fourth quarter results. The headline from Nokia’s results is that it made a pre-tax profit of 439m Euros during Q4 2012, compared to a loss of 954m Euros in the same period last year. The swing back to profitability is bitter sweet for investors as the dividend has been cut to zero. Smartphone sales, particularly of the higher value Lumia range, are credited with the Finnish firm’s turnaround in fortunes.

Nokia's Asha smartphones

Looking more deeply at the figures Nokia revealed it sold less smartphones than in the same period last year; only 6.6 million compared to 19.6 million a year earlier. However a much larger proportion of the smartphones sold were at the more profitable end of the market, more of the Lumia range and less of the Asha range. With the average selling price of its mobiles increasing a significant 33 per cent to 186 Euros and many cost cutting exercises having taken place Nokia seems to be turning around its fortunes.

One of Nokia's Windows Phone 8 powered Lumia smartphones

“We are very encouraged that our team’s execution against our business strategy has started to translate into financial results. Most notably we are pleased that Nokia Group reached underlying operating profitability in the fourth quarter and for the full year 2012,” wrote Nokia CEO Stephen Elop, “We remain focused on moving through our transition, which includes continuing to improve our product competitiveness... delivering more value to our shareholders” he concluded.

Nokia needs to keep up its momentum in the light of these results and new figures about the strong performance of Windows Phone in Europe, particularly in Italy and the UK, may be encouraging.

Windows Phone triples UK market share in the last year

New figures published by research firm Kantar Worldpanel Comtech (KWC) show Windows Phone market share has grown from 2.2 per cent to 5.9 per cent in the UK during the last 12 months. While the percentage remains small compared to the shares of iOS and Android it’s still a significant achievement.

Kantar Worldpanel Comtech looked at the EU5 which includes Britain, Germany, France, Spain, Italy and noted an overall 2.8 per cent improvement in market share on the year. Italy seems particularly fond of the Windows Phone platform as it now enjoys a market share of nearly 14 per cent in that country.

Dominic Sunnebo, global consumer insight director at KWC said of the latest findings; “It has been far slower than Microsoft would have liked, but Windows Phone is now starting to gain respectable shares in a number of key European countries”. However Sunnebo went on to say that the important US and China markets are still challenging for Microsoft and Windows Phone’s performance in those arenas “remains underwhelming”.

HEXUS Forums :: 8 Comments

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Good on Nokia. Hope they can sustain it.
The thing is, windows phone 8, still isn't *there* yet, at least for me.

Why can't I run skype in the background, this was announced as a main feature of this, back last summer. Still Waiting!

Same goes with Whats App, or any of the other drivel people use.

There is an awful lot to like, but they mustn't rest, they have to keep the good velocity they've had before going. I think having a <£100 7.8 offering, like they used too with the 610, will be a good idea.
fewer* smartphones
The hurdle that MS need to sort, IMO, is allowing apps to run from MicroSD. Until that's sorted, the 8S and other budget phones are useless, as there's no room for apps and yet expandable memory.
That is a bit of a problem thou flufflogic, because if you start doing that you have to encrypt them properly (for the DRM, one of the reasons of the suckess of iOS apps has been the relatively low rates of piracy, sadly, 10% is low, even for a <£1 game….) and certify the speed.

Not all flash memory is created equal and microSD cards are not equal at all. As it stands only media or “Application Awarely Stored There AAST (i just made that up)” can be put on them, I don't think this is an issue as with the exception of games its only really media I find ballooning in space. I'd much rather than enhance the background task API first myself.