Nokia Q4 Estimates Upbeat, Thanks to Lumia, Asha Sales
Nokia may have kept its head above water during its fiscal 2012 fourth quarter.
The struggling Finnish smartphone maker released preliminary results for the quarter Jan. 10 and said its Devices and Services business had "exceeded expectations and achieved underlying profitability." The Nokia Siemens Networks also exceeded expectations.
In October 2012, Nokia officials warned of an operating loss of potentially 10 percent of sales. Instead, it may have lost 2 percent of sales, or possibly have broken even.
"We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability," Nokia CEO Stephen Elop said in a statement.
"We focused on our priorities, and as a result, we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently," he continued, "and Nokia Siemens Networks delivered yet another very good quarter."
Nokia estimates that Devices and Services net sales during the quarter were about $5.2 billion, on sales of 86.3 million units.
Mobile phone sales reached 79.6 million units, 9.3 million of which were Asha phones. Smart Device sales reached 6.6 million units, 4.4. million units of which were Lumia smartphones.
In September, Nokia introduced the Lumia 920 and Lumia 820, the latest smartphones in its collaboration with Microsoft and the first to run Windows Phone 8. The Lumia 920 features particularly compelling camera technology—which a marketing stunt may or may not have soured consumers on—and was the first mainstream phone to arrive with wireless charging capabilities.
The 820 has a removable back plate that can be swapped for a plate that also allows for wireless charging—a feature the industry is likely to soon see in a lot more devices.
In November 2012, Nokia introduced the Asha 205 and 206, the latest phones in a lineup intended for emerging markets. An interpretation of the Sanskrit word Asha is "hope."
Elop's efforts to save the Nokia brand have been some combination of hope and pragmatism. In early February 2011, the relatively new CEO made headlines when his internal memo to Nokia employees went viral. In the memo, Elop told the story of a man on an oil platform in the North Sea who wakes to find the platform in flames. With his options reduced to being swallowed by fire or jumping into the dark, icy sea—a once unthinkable option—the man chooses the latter.
A radical decision was necessary for the man's survival, said Elop, and the same was true for Nokia. Two days later, he announced that Nokia was changing its allegiance from Symbian to Microsoft's Windows Phone.
Nokia's first line of Windows Phone devices arrived in an incredibly competitive marketplace and saw meager sales. Meanwhile, Elop cut back and tightened. Nokia has let go of more than 20,000 employees worldwide, and most recently announced that it had sold and leased back its Espoo, Finland, headquarters.
The budget cutting and new devices seem to be moving Nokia in the right direction. It's surely too soon to say that Nokia is out of the water, but the preliminary estimates for its fourth quarter suggest it may have at least spotted land.
Nokia will release its complete fourth quarter 2012 results Jan. 24.