Nokia has released its first quarter results, with the Finnish mobile phone giant shocking investors by announcing a massive 21% drop in mobile phone shipments to 55.8 million units.
According to Reuters, investors had been expecting overall shipments – including featurephones and smartphones – to fall by just 8%.
Overall net sales dropped by 20% to 5.9 billion euros, missing analysts’ expectations of 6.5 billion euros in sales for the quarter.
A bright spot for the company came in shipments of its Windows Phone 8-based Lumia smartphones, with shipments growing from 4.4 million to 5.6 million quarter-on-quarter.
The weak results come near the end of a two-year period in which current chief executive Stephen Elop promised a ‘turnaround’ at the troubled mobile phone maker, with analysts warning the current management team is running out of time.
“Basically, he has only the second quarter,” said Mikko Ervasti at Finnish investment banking and wealth management group Evli.
As SmartCompany reported in August last year, Elop has come under increasing scrutiny recently, with the Finnish Shareholders Federation going so far as threatening an extraordinary general meeting to sack him.
Former Nokia executive Tomi Ahonen, who is an outspoken critic of the company’s decision to abandon its Symbian and Meego platforms in favour of its current Lumia/Windows Phone strategy, a decision he attacked in a 29,000 word essay, is again criticising Nokia’s management decision.
“This strategy has totally failed. Nokia’s Lumia series running Windows Phone is still bleeding customers, refusing to transition even at a one-to-one level from Symbian. Nokia had 34% market share in smartphones when Elop took over, it has 3% now,” Ahonen says.
“Like I predicted, with just over 5% profit margin in the ‘dumbphone’ unit, Nokia is now the ‘Dell of mobile phones’ as an ultra-low-cost ‘box mover’.”
While a key reason for adopting Windows Phone was to increase the company’s marketshare in the US, Ahonen claims that aspect of the strategy has failed as well.
“Nokia’s total US market smartphone sales – all essentially Lumia obviously – [is] down 45% from Q4 to 400,000 units only. And how did the price do? The US average price is down 10%.
“So Americans have seen Lumia, Windows Phone and [the] Nokia-Microsoft [partnership] and said – loudly – not for me!”