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Nokia Clears The Decks Of Its Burning Platform Ahead Of Results Tomorrow

One day before Nokia is due to announce its next set of quarterly results, Nokia (NYSE: NOK) has made three announcements: a milestone reached with Series 40 feature phone purchases, and a buyer for its manufacturing plant in Romania, and a re-casting of its quarterly results for the three quarters preceding the one getting reported tomorrow.

Considering it is unlikely that Nokia will have arrested the declines it has been posting in revenues and market share for the past several quarters, the first two news items are more likely being released now to get investors in a good mood before breaking them the less good news tomorrow.

It is also another signal to the public that Nokia is moving swiftly along in its strategy to change up, in the wake of the famous “burning platform” memo sent out by CEO Stephen Elop (pictured) almost a year ago today.

Series 40. Nokia today announced that it had sold its 1.5 billionth Series 40 feature phone. The sale, appropriately enough, was made in Brazil — which, with the rest of the BRIC block, is a market that all big handset makers are sizing up as the next big target for mobile growth.

It was only yesterday that news emerged that Apple (NSDQ: AAPL) had hired a person (a Brazilian) to oversee Latin America. The Series 40 operating system is a proprietary OS of Nokia’s that is worth watching: earlier this month the company bought Smarterphone to enhance its feature phones, and these devices are being seen by Nokia, Samsung and others as a key ramping-up route to eventual smartphone users.

So much so that RIM’s new CEO had to face a question from an analyst on his first day in the job about whether BlackBerry would be considering a similar route to be able to pick up more users in emerging markets. (For the record, Thorsten Heins didn’t seem to warm to the idea.)

Nokia definitely wants to highlight its activity in the region of Latin America: in the last quarter (Q3) the company reported that revenues had declined by seven percent to $531 million and unit sales by six percent to 10.9 million devices.

Romania. Meanwhile, another step was completed in Nokia’s downsizing strategy, as the company found a buyer for its plant in Romania, closed down in November 2011 as part of its cost-cutting program. The plant had been used to make feature phones, but now it will be used to make home appliances for De’Longhi, the Italian home appliances maker. Financial terms of the deal were not disclosed, and it’s not clear whether any of Nokia’s former employees were included as part of the transfer deal.

Lastly, the re-stated results. As Nokia said that it would, the company has also now published a recast list of figures for financial quarters covering the previous two years. It says that it has done this mainly to account for how it has regrouped its mapping assets, NAVTEQ (NYSE: NVT) with its social location services, which used to be part of Nokia’s Devices & Services segment but are now together form a new division, Location & Commerce.

Important to note that these are not re-reported results: for example, Nokia’s operating loss for Q3 was still €71 million, no matter how you cut it.

Looking ahead to Thursday. Mobile people will be watching tomorrow’s results eagerly, not least because they want to see if Nokia includes some meaningful numbers about early sales of its new Windows Phone 7 smartphones. There has been a lot of dispute about how well these have been going: a report earlier this week indicated that Nokia had shipped 1.3 million Lumia devices, although some back-of-the-napkin analysis from Benedict Evans gave a far lower number for the number of phones that Nokia may have actually sold: between 300,000 and 400,000.

One operator claimed that their stock of Lumia devices, while figures from one retailer in the UK provided to paidContent indicated that Nokia’s Lumia 800 — its first WP device in the UK — accounted for only 0.17 percent of sales in its first weeks on sale in the UK.

All of these are problematic in their own way, so hopefully Nokia will put a full stop to some of these question marks tomorrow.

4 Responses to “Nokia Clears The Decks Of Its Burning Platform Ahead Of Results Tomorrow”

  1. Karma Chameleon

    The problem is that the Lumia phones (and all WP7 phones in general) are not selling well at all.
    There is simply no room for a third ecosystem. Many die-hard Nokia fans are ditching brand loyalty and defecting to Apple or Google, due to the perceived betrayal of Symbian/Meego.

    • Usual premature anti-Nokia speculating bs..

      Over 1m Lumia’s sold, pretty much inline with analyst estimates.. Not fabulous, but I think a very good start as awareness of the product is still very small but will grow significantly in the following quarters.

      Probably will not make much of a dent into iphone sales (great product), but inferior Android handset will be taking a beating in the following years.. 2014 Apple/Nokia/Android: 50%/35%/10% :)

  2. Nokia was on a burning platform and instead of doing the logical thing and bring quality android handsets to the market in a short time frame, they enlisted Microsoft’s help, who quickly arrived on the scene and doused the burning platform in petrol.