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Nokia lowers financial outlook despite Lumia sales of 2 million in Q1 2012

Elop 'increasing company clock speed'

Nokia lowers financial outlook despite Lumia sales of 2 million in Q1 2012
Lumia sales look to be holding up, but according to a new advisory posted by Nokia, 2012 is still going to be tough going for the Finnish giant.

Nokia claims to have sold more than 2 million Lumia handsets at an average price of €220 in Q1 2012 – around 17 percent of the 12 million smartphones sold throughout the quarter – but what it brands as "competitive industry dynamics" in regions such as India, Africa, China and the Middle East have hit its margins.

Lumia love

As such, the the Device & Services division's operating margin for Q1 2012 has been reduced from around break even to a current advisory of minus 3 percent.

Projections for the second quarter are likely to be similar, though president and CEO Stephen Elop claims such sticky times are to be expected.

"Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition," said Elop.

"Within our Smart Devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success.

"Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States."

No clocking off

Indeed, Lumia is definitely the silver lining to the dark cloud that continues to hang over Nokia. The firm claims activations have rose sequentially, month after month, since the first devices launched in November 2011.

Lumia sales will likely ramp up even further in the months ahead: the flagship Lumia 900 has just launched in the US, while its UK debut has been pencilled in for 27 April.

It's also claimed Lumia is gaining vital market share with both distribution partners and, more importantly, consumers, backed up by a Windows Phone Marketplace Nokia pegs as being 80,000 apps strong.

"We are continuing to increase the clock speed of the company," added Elop.

"The change is tangible, and we are proud of the way Nokia employees are quickly responding to the needs of consumers and partners."

Devil in the detail

In all, Nokia estimates that Devices & Services net sales in the first quarter 2012 were €4.2 billion (around $5.5 billion), with €2.3 billion ($3.0 billion) coming from 71 million sales of mobile handsets, and €1.7 billion ($22 billion) from the aforementioned 12 million smartphones sold.

Nokia claims net cash and other liquid assets were approximately €4.9 billion ($6.4 billion) at the end of Q1 2012.

Nokia will deliver its full first quarter results on 19 April.

[source: Nokia]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.