Nokia announced its earnings for the first quarter of 2012, and as expected, they suck. Its net sales dropped 29% year-over-year to €7.35 billion, while its operating profit dipped from €439 million to an operating loss of €1.34 billion.
It has seen a decline in not only smartphone sales, but also mobile phone sales. It is expecting to make an operating loss again in the next quarter, as it scrambles to get its device strategy in place.
While most of the loss can be attributed to restructuring, it would have reported a loss even on an adjusted, non-IFRS basis.
While the sales of Lumia devices have apparently been encouraging, they hardly offset the decline in sales of Nokia’s Symbian devices.
“We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges.” said Elop, Nokia’s CEO. “We are confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term.”
At this point, Nokia’s future is almost entirely tied to Microsoft’s Windows Phone. 2012 is going to be a very crucial year for both of them, and should tell us whether or not Nokia made the right move by betting everything on Microsoft’s horse which may be capable of smoking the other horses, but entered the race too late.
Nokia plans to focus on the budget smartphone segment with cheaper smartphone options like the Lumia 610, and also focus on international markets to drive growth.