Nokia, Finally Selling Lumias, Looks Forward to a Phone-Free Future

Once Nokia completes its deal with Microsoft, it will consist of NSN, Here and Advanced Technologies, a mix of R&D and patent opportunities.

Nokia, which is in the process of selling its mobile phone division to partner Microsoft for $7.1 billion, announced the results of its 2013 third quarter, sharing that it sold 8.8 million Lumia smartphones—a jump of 40 percent over a year ago.

This news, which would have been the highlight of a call several quarters back, was touched on only lightly Oct. 29—according to a transcript from Seeking Alpha, the word Lumia was spoken only twice—as Nokia leadership instead focused on providing analysts with a heady sense of what to expect once the deal with Microsoft is completed in early 2014.

When that happens, Nokia will have three main businesses, NSN [Nokia Siemens Network], Here and Advanced Technologies, Chief Financial Officer Timo Ihamuotila said during the call.

"It's important to point out that all three businesses ... are expected to benefit from the sale of our Devices & Services business," said Ihamuotila.

He added that all three are also generating cash and opportunities, and that Nokia has "leading industry positions in all three businesses."

Nokia announced plans to buy Siemens' share of NSN, their joint telecom venture, on July 1. While Nokia will have competition from Huawei and others, it will also stand to benefit from the Long-Term Evolution (LTE) networks still to be deployed around the world.

Here, Nokia's extensive, cloud-based mapping suite, is set to enjoy opportunities in markets well beyond smartphones.

The automotive industry will be a great cash-generator, particularly as cars become more connected.

"We generated a lot of positive buzz at the Frankfurt Motor Show in September when we unveiled our new Connected Driving offering, which connects cars to the cloud by leveraging our software, services and content, thereby enabling new driving paradigms," said Ihamuotila.

Companies such as SAP and Oracle, he added, are also interested in the business advantages that can be gained through the "location intelligence" Here can provide.

Advanced Technologies is a new segment, comprised of Nokia's enviable patent portfolio—and the licensing opportunities it creates—as well as Nokia's "advanced research activities and the development of concept products," Ihamuotila explained.

While Nokia's will be a tidier house, without its handset division, the latter was something of a highlight during the quarter.

While NSN net sales decreased 7 percent quarter-on-quarter, and Here sales decreased 9 percent quarter-on-quarter, sales of devices and services rose 6 percent from the second quarter. In addition to its Lumia sales, up 19 percent quarterly, Nokia sold 55.8 million mobile phones, up 4 percent quarter-on-quarter.

Nokia posted an operating profit of approximately $80 million on revenue of $3.8 billion.

"Our strategy work is making good progress and it has already become clear that there are meaningful opportunities for all our business areas: NSN, Here and Advanced Technologies," Interim CEO Risto Siilasmaa, said in a statement.

In all of these businesses," he added, "we have strong assets that we continue to invest in for the long-term benefit of our customers and shareholders."