wordpress blog stats
Connect with us

Hi, what are you looking for?

Nokia Q3-2012: Net Loss At EUR 576M; Overall Handset Sales Down 34% YoY

Nokia continues to report losses in quarter ended 30th September 2012. The company reported net sales of EUR 7.2 billion for the quarter, down 19% year-on-year and 4% sequentially, and its operating losses were at EUR 576 million compared to operating losses of EUR 71 million, that it registered in Q3-2011.

Nokia CEO, Stephen Elop said that Q3 was a difficult quarter for the company and that Nokia was operating profitably on non-IFRS basis. “While we continue to focus on transitioning Nokia, we are determined to carefully manage our financial resources, improve our competitiveness, return our Devices & Services business to positive operating cash flow as quickly as possible, and ultimately provide more value to our shareholders,” he said.

Product Highlights:

– Lumia Q3 volumes decreased quarter-on-quarter to 2.9 million units. The company believes that this was because of announcing new products. Nokia had shipped 4 million Lumia phones during the last quarter.

– Mobile Phones Q3 volumes increased quarter-on-quarter to 77 million units; with new Asha full touch smartphones clocking 6.5 million units in sales during the quarter.

– Nokia announced the Nokia Lumia 920 and the Nokia Lumia 820, the first devices in Nokia’s Windows Phone 8 range which are expected to ship in select markets during the Q4 2012. The Nokia Lumia 920 is the flagship Windows Phone 8 smartphone, including the latest advances in Nokia PureView imaging innovation as well as wireless charging. The Nokia Lumia 820 is a mid-range smartphone.

– Nokia announced the Nokia Asha 308 and Asha 309, new additions to the Asha Touch family. Nokia also released a new version of Nokia Xpress Browser, which it claims, enables up to 90% more efficient mobile browsing and faster access to rich web applications compared to conventional browsers.

– Nokia unveiled Nokia Life+, an upgraded version of its Nokia Life service. Nokia Life+ is a Web application, which will provide information on education, health and “infotainment” topics. Nokia Life+ will be supported by the Nokia Asha 308 and Nokia Asha 309 smartphones alongside other Nokia mobile phones.

– Nokia announced wireless charging accessories and partnerships. The Fatboy Recharge Pillow provides an alternative way to charge the Lumia 920 and Lumia 820 wirelessly, while HARMAN’S JBL brand introduced the JBL PowerUP, a wireless charging docking station with high quality audio. Nokia has also agreed with Virgin Atlantic to put wireless charging stations in the London Heathrow Clubhouse lounge and Coffee Bean & Tea Leaf to put charging plates on tables in some of their cafés.

– Nokia completed the acquisition of all technologies and intellectual property from Scalado AB to strengthen Nokia’s leading position in mobile imaging. As part of the transaction, approximately 50 imaging specialists were transferred to Nokia.
–  During the third quarter, Amazon became a Nokia Location Platform(NLP) licensee for maps and geocoding.

– Nokia Location & Commerce brought Nokia City Lens to its Lumia range. Nokia City Lens is an augmented reality application, which turns the phone’s camera viewfinder into a new way to see information about restaurants, shops, hotels and more overlaid onto the surfaces of buildings.

– Location & Commerce released an updated version of Nokia Transport, a mobile application for the Lumia range providing underground, tram, suburban train and bus directions for more than 500 cities in 46 countries.

– The division released an update to the beta version of Nokia Pulse, an application for smarter messaging, automatically tagging even simple messages with location information.

– In indoor mapping, Location & Commerce continued to increase its coverage of venues and buildings around the world and now covers 5,100 venues and altogether 18,000 buildings in 40 countries.

The devices and services segment business of handset major Nokia contributed EUR 3.56 billion to net sales for the quarter ending  September 30th 2012, down 34% year-on-year and 11% sequentially. The segment reported operating losses of EUR 683 million compared to operating profit of EUR 168 million that the company reported in the same quarter, last year.

Smartphone sales decreased by 56% Year on Year and 37% Quarter on quarter, while mobile phone sales (other than smart phones) witnessed a decline of 19% YoY and an increase of 3% QoQ. Gross margin(Non IFRS) for the devices and services segment declined to 18.5%, from 25.7% in Q3-2011.

Payment from Microsoft: Nokia received the quarterly platform support payment of USD 250 million (EUR 202 million) from Microsoft. Interestingly this is the same amount that it received in earlier tranches. The company said that it has a competitive software royalty structure, which includes minimum software royalty commitments. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US Dollars. Nokia has said that the total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitments.

Financials

Devices & Services

– Device Sales: Effective April 1,2011, Devices & Services business includes two new operating and reportable segments – Smart Devices, which focuses on smartphones, and Mobile Phones, which focuses on mass market mobile devices – as well as Devices & Services Other. Device sales for Nokia(in volume) were down 22% year-on-year and 1% sequentially, at 82.9 million units.

In terms of volumes, Smart phone sales have declined 63% YoY and 38% QoQ to 6.3 million units, in the quarter. Mobile phones/feature phone sales have declined 15% YoY and increased 4% QoQ to 76.6 million units.

Nokia’s market share in the Smartphone market has declined significantly. It said that the decline was primarily due to lower volumes partially offset by higher ASPs. On a year-on-year basis, the volume decline was primarily due to lower Symbian volumes partially offset by Lumia volumes. On a sequential basis, the decline in Smart Devices net sales in the third quarter 2012 was primarily due to lower Lumia and Symbian volumes, according to the company.

Feature phone sales also declined. According to Nokia, on an year-on-year basis, the decline in Mobile Phones net sales in the third quarter 2012 was primarily due to lower volumes as well as lower ASPs. On a sequential basis, the increase in Mobile Phones net sales in the third quarter 2012 was due to higher volumes.

– Nokia’s overall Average Selling Price (including services revenue) decreased to EUR 43 from EUR 51 in Q3-2011 , however, the ASP was EUR 48 in the previous quarter. ASP for Smart phones was EUR 155 and for feature phones was EUR 31.

– As announced, Nokia started reporting the new Location & Commerce business which combines NAVTEQ and Nokia’s social location services operations from Devices & Services.  In addition to a portfolio of products and services for the ‘wider internet ecosystem’, the Location & Commerce business intends to create integrated social location offerings for Nokia smartphones, including Nokia products with Windows Phone.

The segment reported net sales of EUR 265 million a 6% YoY and sequential decline, primarily due to lower sales of personal navigation device customers as industry volumes continued to decline, almost entirely offset by higher sales of map content licenses to vehicle customers due to higher consumer uptake of vehicle navigation systems. In the third quarter 2012, the sequential decline in external Location &
Commerce net sales was primarily due to lower map update sales, related to the timing of Nokia’s update campaigns, and seasonally lower vehicles sales, almost entirely offset by the non-recurrence of a negative sales adjustment related to historical license fees in the normal course of business for a particular customer.
In the third quarter 2012, the year-on-year and sequential declines in internal Location & Commerce net sales were due to declines in sales in Nokia’s Smart Devices business unit.

Future Outlook

Nokia expects its non-IFRS Devices & Services operating margin in the fourth quarter 2012 to be at -6% plus or minus 4 percentage points.Nokia expects the fourth quarter 2012 to be a challenging quarter in Smart Devices, with a lower-than-normal
benefit from seasonality in volumes, primarily due to product transitions and its ramp up plan for new devices.


You May Also Like

News

Yes Bank Ltd posted a net profit of ₹151 crore during the third quarter of the current financial year compared to a net loss...

News

Key takeaways Network18’s digital news revenue increased by 50% YoY for the second consecutive quarter Consolidated Net Profits grew 125% YoY Network18 Digital saw...

News

Netflix’s two day StreamFest in December 2020—where users in India could practically watch Netflix’s entire catalogue for free—brought millions of users to the service,...

News

Media company HT Media Limited posted a consolidated operational revenue of ₹341 crore, which is down 40% YoY and up 31% over the previous...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to Daily Newsletter

    © 2008-2018 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ