Nokia sold 2 million Lumia Windows Phones in Q1, financial results to be worse than expected

Nokia managed to sell over 2 million Lumia Windows Phones during the first quarter of this year. That compares favorably to the 500,000-700,000 we estimated it sold during the fourth quarter of 2011. However, the Q4 2011 number was achieved over just 7 weeks (since the Lumias started selling during the quarter). Also note that the heavily marketed Nokia Lumia 900 only started selling in Q2, so those device’s sales aren’t part of these numbers.

Still, Nokia claims that activation numbers for the Lumia range have been growing sequentially in every month since starting sales in November.

While having sold 2 million Lumias will certainly keep Nokia’s status as the No.1 Windows Phone device maker, the overall smartphone sales numbers for Q1 are quite bad.

In Q3 2011, Nokia sold 16.8 million smartphones. In Q4 the number was 19.6 million and it seemed that Nokia’s worst days were over and the company restarted growing in the smartphone space.

Turns out that was just a short term thing. In Q1 2012, Nokia managed to sell just 12 million smartphones. That’s a staggering 38% drop compared to the previous quarter, and a mind-boggling 50% less than in the year-ago quarter, when Nokia sold 24.2 million smartphones.

With Lumia sales on the rise, the fall in smartphone sales can only be attributed to the performance of Symbian devices. Clearly, after almost a year of it being proclaimed dead left and right, most people in the world got the message loud and clear. Yet not many of those seem willing to opt for a Windows Phone-powered Lumia instead. At least not yet.

It’s amazing to think that just a couple of years ago, Nokia was selling more smartphones than its biggest competitors combined. And yet in Q1 2012 Samsung sold more than three times as many smartphones as Nokia. That’s how quickly things change in this world.

Nokia expects its Q1 revenue to be at €4.2 billion, with just €1.7 billion of that coming from smartphones. Nokia’s average selling price for its Lumia range was €220, apparently. That’s interesting because that number is lower than what the cheapest Lumia available in Q1, the 710, costs almost everywhere. Perhaps special offers made up the bulk of sales then.

Gross margin on smartphones was just 16%. This, alongside various other factors, contributed to the fact that Nokia will post a loss of about 3% for the first quarter.

The last bit of bad news is that Nokia expects its profit for the second quarter of this year to be “similar to or below” the Q1 level. Nokia blames this on “competitive industry dynamics; timing, ramp-up, and consumer demand related to new products; and the macroeconomic environment”. In other words, don’t expect better results in Q2.

Nokia’s recovery has just been postponed to the third quarter of this year. Maybe Windows Phone 8, which should launch around then (or in Q4 at the latest) will help Nokia finally grow by healthy margins again. If it doesn’t, the future of the company will be very bleak.

Nokia will report its Q1 2012 results on April 19. All of the above comes from an outlook statement that Nokia provided today via a press release.

Author: Vlad Bobleanta

Share This Post On