Nokia Q4 2011: Profits Nosedive, New Phones Yet To Take Off

By Tarmo Virki

HELSINKI (Reuters) - Nokia reported a 73 percent fall in fourth-quarter earnings as sales of its new Windows Phones failed to dent the dominance of Apple's iPhone or to compensate for diving sales of its own old smartphones.

The world's largest cellphone maker by volume unveiled a major strategy shift to Microsoft software for its smartphones last February in an attempt to challenge Apple and Google's Android. But Apple's phones in particular have proved far more popular.

Apple reported earlier this week sales of 37 million iPhones for the December quarter. Nokia has sold over 1 million Windows Phones since its launch in mid-November.

" is more than some were expecting, but it's not going to worry Apple or Google," said analyst Nick Dillon from research firm Ovum.

Nokia said it expects its phone business' underlying earnings to be around breakeven in the first quarter, with sales falling more than usual in the seasonally weaker quarter.

"The report highlights that the start of the Windows strategy is slow, and we have very little concrete data to predict its success at this point," said analyst Michael Schroder from FIM Securities.

"There are a lot of uncertainties. These are critical times for the future of the whole company. The next months will be extremely important".

SIILASMAA TO REPLACE OLLILA

Nokia's fourth-quarter core earnings per share of 0.06 euros were better than the market's expectation for 0.04 euros. The results were boosted by a $250 million payment from Microsoft as part of their Windows Phone sales deal.

Shares in the company climbed 5.3 percent to 4.27 euros after the results, helped also by Nokia's proposed 0.20 euros-per-share dividend for 2011, slightly more than expected.

Nokia's board proposed to name Risto Siilasmaa as its next chairman to replace long-time leader, Jorma Ollila, who is due to step down in May.

Siilasmaa, a 45-year old entrepreneur, has been a Nokia board member since 2008 and is known in Finland as the founder of software security company F-Secure, but has a low profile outside the country.

Its quarterly net loss totaled 1.1 billion euros ($1.43 bln), or 0.29 euros per share, due to a 1.1 billion euro writedown for its digital mapping assets. ($1 = 0.7708 euros)

(Additional reporting by Jussi Rosendahl, Terhi Kinnunen and Eero Vassinen; Editing by Jodie Ginsberg)

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Comments

[Colonel Ingus]

11:59 AM on 01/27/2012

I just bought the Nokia N8. It has a 12mp camera with a Carl Zeiss lens. Out freaking standing! Love this phone. Of course it runs Symbian3 OS and doesn't have thousands of apps to choose from like Apple and Android but I don't care. My days of staring into my phone and pecking away at a tiny, virtual keyboard are over. It's a top-quality phone and a top-quality camera and that's all I want.

[Michael Falcon]

08:41 AM on 01/27/2012

Nokia should have gone with Android at first place, NOT Windows phone, since people are NOT familiar with W7!

[Dan Pierce]

04:20 PM on 01/27/2012

Yeah, because why not be like all those successful Android manufacturers?

Well, except for HTC, Motorola, LG and Sony/Ericsson.

[Mailman]

08:06 AM on 01/27/2012

I have an android phone right now, but when my contract is up I'll switch to WP7.

[Lordcron]

02:26 AM on 01/27/2012

Most people don't do there own homework and therefore suffer from poor products. People think a dual core phone is better then a single core phone but cores have nothing whatsoever to do with power. The true power has everything to do with well written streamlined code. Microsoft's OS is so much better then Android that it can run faster and smoother on a single core then Android runs on a Dual or more core(s). Apps are far over blown. No Windows Phone 7 Mango doesn't have millions of apps but it does have over 60,000 apps and the ones that really matter is on that platform and more are being added every single day.

The clear choice going forward is Mango.
By the way, Nokia is offering the Nokia 900 for only 99 bucks with AT&T in March. Get that phone!

[Colonel Ingus]

11:59 AM on 01/27/2012

I think Nokia is poised to bounce back.

[jasonedward]

01:14 AM on 01/27/2012

For crying out loud! The Lumia 800 has been released for 2 months and 10 days. WTF does HuffPo expect? This article is ridiculous.

[billy the kid]

10:48 PM on 01/26/2012

HP is shamless go read real reviews about how Nokia did this quarter

[helioszephyr]

10:00 PM on 01/26/2012

Nokia is headed via RIM. For their shareholders' sake, they should offer themselves to an MS purchase, while they still have some value.

[starshot49]

09:38 PM on 01/26/2012

poor nokia. i remember when they were a big deal.

[Nathan Ottenson]

07:10 PM on 01/26/2012

It won't take long for people to realize that WP if a serious competitor. I've had mine for a year and absolutely love it. Looking forward to picking up a Nokia phone when I get a chance. Replaced my gf android with a WP because she was so taking by mine

[SteelMerton]

11:12 PM on 01/26/2012

Won't take long? It already has.

[muscle3332007]

05:57 PM on 01/26/2012

Nokia phones have always had the best reception. I can never understand all the people who buy I Phones that drop calls constantly and then brag about how much they love them.

[ProudToBeVeryLiberal]

06:58 PM on 01/26/2012

Because they would buy an iBrick for $200 if Apple sold one?

[SteelMerton]

11:26 PM on 01/26/2012

While it may amuse some people to opine that an Apple customer will buy anything, it simply isn't true. There's a long list of Apple products that didn't sell.

Typical "anyone who disagrees with me must be stupid" attitude often displayed by the deluded.

It's easy to see that yhe similarities of these products far outnumber the differences, unless one has an irrational hatred of one company over another.

[Anthony Dodd]

01:09 AM on 01/27/2012

You're interesting.

You're okay with legalized slavery in China. But if it's particularly bad slavery in China... or really just slavery involving Apple... you pretend to be all liberal.

What a fraud you are.

[mo524]

09:01 PM on 01/26/2012

They call it the Icult.

[NerdyStudent]

04:57 PM on 01/26/2012

Cool story, but my personal experience is still showing that my apps sell better on the WP7 platform than Android or IOS...it pays to be competing in a smaller market.

[jasonedward]

01:15 AM on 01/27/2012

What apps are you making for WP7? I'm an avid user and LOVE my Cyan Lumia 800.

[PotholesInMyLawn]

04:26 PM on 01/26/2012

Just Got an Nokia N9 just because it was not a Hemroid, ICraps or Vindows!
It uses MeeGoo. which was DOA! But that's what I like... A phone OS that is
so obscure that it rocks in silence! Only hardcore geeks will write the oddest
but coolest apps for it!

Kinda like my M600i and P1i... Just put those two units into cold storage
had those units for years!

Yep I'm sure you have never hear of them either but they used the Symbian OS
which also rocked!!

[teddyray1]

06:42 PM on 01/26/2012

Wow, you sound so cool, I've probably never heard of your favorite band because they haven't gotten together yet. @@

[PotholesInMyLawn]

12:02 PM on 01/27/2012

HA!!!!!!!! Busted! (Shakes Head and Wonders why my education constantly fails me on sites with no edit options!) Good Kill! Teddy FTW!

[Atra Lupis]

01:27 AM on 01/27/2012

I actually HAVE a Symbian OS based phone ... However, mine is a Sony Ericsson.

Aside from a few issues here and there finding certain apps for it ... It's a bloody dream.

[Colonel Ingus]

12:02 PM on 01/27/2012

Nokia N8 here. Symbian3 works for me. Love this phone and it was only $350 new, unlocked.

[PotholesInMyLawn]

12:08 PM on 01/27/2012

Yes Both of mine are Sony Ericsson as Well. I have had them for a while. So long that I have had to refresh them with new parts. I got my first when in the UK... I went to London and saw this pretty white phone Vesper Lynd (M600i) fell in love with the brand and the OS. I will keep in in rotation.. I am looking forward to the N9 I will say... first time in forever that I have strayed away from Sony Ericsson!

[GZub]

04:20 PM on 01/26/2012

I was watching TV with my 17 yr. old daughter last night when a commercial for the Lumia 710 came on. She commented on what a cool phone it was. I take that as a good sign for the future of the Nokia Windows Phones

[six seven]

12:55 AM on 01/27/2012

I saw a coworker pull out a Lumia 710 in the elevator to check facebook. I asked her how she liked it... She said she was still getting used to it (her first smart phone) but she liked it a lot.

[Jaskoen]

03:24 PM on 01/26/2012

Huh? Nokia's first WP7 phone was released here, what, 4 days ago? And HuffPo already sounding the death knell? A bit premature, I think.

[jasonedward]

01:17 AM on 01/27/2012

Hear, hear!

This article is ridiculous.

[Steven Travis]

03:05 PM on 01/26/2012

And before Nokia became a big player, Motorola owned the cell phone market. The tech industry is one where 'if you snooze you lose'.....