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Nokia releases figures for ‘difficult’ Q2 following slump in smart device sales and restructuring costs

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By The Drum Team, Editorial

July 19, 2012 | 3 min read

Nokia has issued its figures for the second quarter of 2012, having recorded a year-on-year decline in smart device sales of 34 per cent.

The telecommunications company has reported that net sales of smart devices fell by from €2,351m to €1,541m during the second quarter of 2012, in comparison with the same period last year, with 6.5m units less being sold.

The decline was primarily due to lower Symbian volumes, which were partially offset by Nokia Lumia devices, which sold around 4 million units.

Meanwhile, the decline of mobile phone sales was 11 per cent down on the previous year, at €2,291m, with 71.8m units sold, an increase of 2 per cent on 2011. However operating expenses also increase by seven per cent for the same period.

In total, the company’s net loss for Q2 is reported to be €1.41 billion from €368 million a year earlier.

The company is also undertaking a global restructuring process, that has seen it shed tens of thousands of jobs in recent months.

Commenting on the Q2 results, Stephen Elop, Nokia CEO, said:"Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.

“We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices. In Location & Commerce, our business with auto-industry customers continued to grow, and we made good progress establishing our location-based platform with businesses like Yahoo!, Flickr, and Bing. We continued to strengthen our patent portfolio and filed more patents in the first half of 2012 than any previous six month period since 2007. And, we are encouraged that Nokia Siemens Networks returned to underlying operating profitability through strong execution of its focused strategy.

“We are executing with urgency on our restructuring program. We are disposing of non-core assets like Vertu. We are taking the necessary steps to restructure the operations of the company, which included the announcement of a new program on June 14. Faster than anticipated, we have already negotiated the closure of the Ulm, Germany R&D site, and the negotiations about the planned closure of our factory in Salo, Finland are proceeding in a collaborative spirit.

“We held our net cash resources at a steady level after adjusting for the annual dividend payment to our shareholders. While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible."

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