Nokia has released its Q2 2012 results, reporting an operating loss of €826 million, with net sales of €9.275 billion (down 19% YoY). Nokia's Devices and Services division's losses were €471 million. Margins in devices and services were -11.8% (down from -4% in Q2 2011 and down from -5.2% in Q1 2012). Total smartphone device sales were 10.2 million (4 million Lumia), compared with 16.7 million units in Q2 2011 (down 39% YoY) and 11.9 million units in Q1 2011 (down 14%, QoQ).
At today's Windows Phone Summit, Microsoft announced a new software update that will be available for existing Windows Phone handsets. Labelled Windows Phone 7.8, the update will feature some of the core elements of Windows Phone 8 that can be supported on the older hardware, including the new Start screen.
In a press release this morning, Nokia has revealed plans to "sharpen its strategy, improve its operating model and return the company to profitable growth". The company will be cutting up to 10,000 jobs by the end of 2013, closing its famed Salo factory in Finland, making a series of targeted investments around location and product experiences, making changes to improve the competitiveness of its feature phone business and making chnages to its leadership team.
Nokia also updated its financial guidance for Q2 2012, indicating that competitive industry dynamics are negatively affecting its smartphone business to a greater extent than previously expected. As a result non-IFRS Devices & Services operating margin will be below the Q1 2012 level of -3%.
When Microsoft and Nokia announced their partnership in February of last year, executives made it clear that the partnership would extend beyond smartphones into other business areas, such as location and mapping. The latest fruits of this collaboration are now apparent, with the addition of traffic information and geocoding algorithms, from the Nokia Where Platform, to Microsoft's Bing Maps.
Following last week's profits warning, Nokia has released its formal Q1 2012 Results, reporting a non-IFRS loss of EUR 260 million, on net sales of EUR 7.3 billion (down 29% YoY). Nokia's 'Devices and Services' division's loss was EUR 127 million, compared to a profit of EUR 292 million in Q4 2011). Total smartphone device sales were 11.9 million, compared with 24.2 million units in Q1 2011 (down 51% YoY) and 19.6 million units in Q4 2011 (down 39%, QoQ). Gross profit margins on smartphones in Q1 were 15.6% (down from 28.9% YoY). Quotes and comments below.
Ahead of the announcement of its quarterly results next week, Nokia has issued a statement warning that earnings, margins and device sales in its key Devices & Services division will be lower than expected for the first quarter of the year and that there will be little improvement in the second quarter. Nokia's current estimate for quarter one is that non-IFRS Devices & Services operating margins will be -3% (down from expected break even), with similar or lower figures anticipated for the second quarter.
Chinese smartphone manufacturer ZTE has announced their second Windows Phone at Mobile World Congress today in Barcelona. The ZTE Orbit is "based on the latest version of Windows Phone" and continues the ZTE ethos of providing lower specification devices while still delivering high quality experiences. With 4GB of memory, and a 5 megapixel autofocus camera with LED flash, we're expecting to see the Orbit rebranded by network operators as an entry level Windows Phone device in the pay monthly market, or as a smartly priced pay as you go handset. Availability is expected in Q2, there's no word yet on expected prices, but something around the 150 Euro mark would be our estimate.
Today at Mobile World Congress in Barcelona, Nokia announced the Nokia Lumia 610, the first Tango powered Windows Phone targeted towards the lower end of the market. With 256MB of RAM and "the new software release from Microsoft" that supports lower memory and processor specs, the Lumia 610 is looking to have an impact with the younger generation. The Nokia Lumia 610 will retail for 189 Euros before taxes and subsidies, and will be available in Q2.
Nokia hold their MWC press conference today, with a kick off time of 08:30 CET (7:30 GMT). We're expecting multiple device announcements from across Nokia's portfolio. From this story you can follow our live coverage, coming direct from MWC in Barcelona. You can also follow our coverage on Twitter at @aas and @AA_WP.
Most of the numbers are now in for Q4, 2011 and, while some are estimates, we now have a pretty good idea of the state of the mobile industry for the last quarter. Phones grew 6% year on year, smartphones by a whopping 63%, with the latter now at 36% of the overall market. The top three companies were the same by either metric - Apple, Samsung and Nokia are way ahead of the rest.
