Stephen Elop under pressure as Nokia’s smartphone sales collapse by 27%

Troubled Finnish mobile phone giant Nokia has reported another horror quarter, with overall mobile phone and smartphone sales slumping 27% year-on-year during the second quarter of 2013 and an overall quarterly loss of €115 million ($A190m).

Overall, the Finnish communications giant saw its net sales plunge 24% for the quarter, from €7.542 billion for the second quarter of 2012 to €5.695 billion for the same quarter this year.

However, the company’s net losses narrowed to €115 million for the quarter, from €824 million for the same quarter a year ago.

Nokia recorded year-on-year falls in mobile phone shipments across all regions during the second quarter, with its total shipments (including featurephones and smartphones) down 27% to 61.1 million from 83.7 million a year ago.

Unit shipments were down across every region, including Europe (down 26% to 11.3 million units), Middle East and Africa (down 15.5% to 16.6 million), Greater China (down 48% to 4.1 million), Asia-Pacific (down 29% to 20.2 million), North America (down 17% to just 500,000) and Latin America (down 29% to 8.4 million).

The picture was no better in its Lumia smartphone unit, where unit shipments fell 27% from 10.2 million units a year ago to just 7.4 million this year, with the company keen to emphasise a quarter-on-quarter increase in shipments from 6.1 million units.

“Overall, Lumia volumes grew [quarter-on-quarter] 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,” Nokia chief executive Stephen Elop says.

Independent mobile phone analyst, former Nokia executive and outspoken critic of Stephen Elop, Tomi Ahonen, acknowledged the quarterly increase in sales in an otherwise weak quarter.

“Average sales price massive fall from €191 to €157 – I think this is a Nokia record collapse in average price for smartphones in just one quarter. The smartphones are still sold at a huge 14% loss per phone, so it’s pretty bleak. But if you want a silver lining, this is at least a [quarterly] increase in sales. The second time since 2011.

“Nokia’s smartphone market share was 33% in 2010. It’s now literally only one tenth of that, at 3.4%… Nokia grew smartphone sales 52% from 2009 to 2010 (from 68 million to 104 million). Meanwhile Windows based smartphones declined 20% from 15 million to 12 million in the same period. I think we see who the poison is in this ‘partnership’.

“Did I mention, since Elop announced this partnership, the smartphone unit has generated a loss every single quarter since?”

The results come a week after Nokia unveiled its new Lumia 1020 smartphone, which the company hopes will help revive its flagging fortunes.


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