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Summary:

Nokia’s low-end range isn’t doing so hot in the face of competition from Android and others. Although Lumia sales are up a third since the last quarter, overall sales are down and analysts aren’t pleased.

Nokia CEO Stephen Elop

Apparently people buy more of your smartphones if you put out cheaper versions. That’s the key takeaway from Nokia’s latest results, issued on Thursday.

Sales of the Finnish firm’s Lumia Windows Phone handsets were up 32 percent quarter-on-quarter, with 7.4 million units being sold in Q2 of this year as opposed to 5.6 million in Q1. That said, sales of Nokia’s non-smart handsets (the non-touch Ashas) were down 4 percent to 53.7 million units, meaning a 6 percent quarter-on-quarter drop to €2.7 billion ($3.5 billion) for the Devices and Services unit as a whole.

The mid-range Lumia 720 and low-end Lumia 520 are the heroes here. Here’s what Nokia CEO Stephen Elop said in a statement:

“We are very proud of the recent creations by our Lumia team, from the Lumia 520 — our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the U.S. and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week.

“Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.”

To my mind, Nokia’s most intriguing device at the moment is the Asha 501, a full-touch handset that retails at less than $100 while doing most of the social stuff smartphone users require. Elop said Nokia was “very encouraged by the consumer response to [its] innovations in this price category,” but the firm would “take actions” to make its dumber-phone offerings more focused and competitive – the key rivals there are super-cheap Android and BlackBerry phones, and now the dark horse that is Firefox OS.

Nokia Siemens Networks (NSN) achieved underlying profitability, but sales were down 1 percent to €2.8 billion. Nokia said this was a reflection of a “focused strategy” – that whole division is in flux anyway, as Nokia is in the process of buying out Siemens’s stake. The other interesting part of the results was HERE, Nokia’s open-ish mapping platform. Sales were up 8 percent quarter-on-quarter, reaching €233 million.

Of course, while the quarter-on-quarter picture looks vaguely positive, the year-on-year view shows Nokia still has a way to go. The company’s net loss may be down from €1.4 billion (Q2 2012) to €227 million million (Q2 2013), but sales are down 24 percent over the same period, from €7.5 billion to €5.7 billion.

This has disappointed analysts, who were hoping for sales in the region of €6.4 billion and a quarterly loss of €258.8 million. Nokia’s stock fell by almost 4 percent (at the time of writing) on the Helsinki Stock Exchange after the results came out – the company remains in choppy waters.

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  1. Satya Srinivas Thursday, July 18, 2013

    Lumia phones are without doubt brilliant in terms of both design and performance. But Nokia might need more time to make the Windows Phone powered Lumia phones viable alternatives to the likes of iPhone and Galaxy Series.

    Hope that Nokia gets the time so that it doesn’t end the Motorola way.

  2. If what matters are smartphone sales then it’s looking quite interesting.
    For the first 2 quarters Lumia sales are at 13mil ,so on track for over 30 mil for 2013 . last year first 2 quarters were 6 mil units and full year 11.3mil Lumia sales.
    Granted last year smartphone sales were 35mil ,most of them Symbian.
    With Symbian gone they need to minimize the decline in dumbphones (including your beloved Asha) and offset it with increases in smartphones. The ASP ratio smartphone vs dumbphone is about 6 so a gain of 0.5 mil units smartphone would offset a 3 mil decline in dumbphone.
    This quarter could be bottom, Q1 2014 could be lower, with dumbphones dropping hard they might need 8.8 mil smartphones to not drop bellow Q2 2013 revenue and that’s doable if they keep fighting.
    They could use a great phone but they don’t have that just yet.

  3. I love my Nokia Lumia 900, 1 year and still fighting strong. It still competes with most smartphones out there. Most people still have the Iphone 4 or Samsung Galaxy 1 or 2. This oldie but a goodie can still fight. Now with 7.8 WP update I can take advantage of the full screen. Everyone that sees it, stops and complements on how beautiful it looks.

    Nokia needs and will get more time to push out more Lumia’s. The 1020 is going to be a milestone. I hope that At&t sales staff push these products more. Unfortunatly, they themselves are biased to Apple and Samsung products.

    1. You do realize that roughly 120 million iPhone 5 devices have been sold since launch, and about 20 million Samsung Galaxy S4 devices have been sold since launch?

      So, your statement that most people still have the iPhone 4, and Samsung Galaxy 1 or 2 is pretty inaccurate especially as you look at the total number of Nokia Lumias sold during the same time period?

      Just trying to keep you honest especially as you point to other people’s biases.

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