26 January 2012

Nokia profits take a big hit

Having once dominated the global cell phone market, Nokia Corp on Thursday posted a fourth-quarter net loss of €1.07 billion (£897 million), even as the company's first Windows smartphones went on the market in Europe and Asia.

The Finnish company had been trying to stage a comeback with the Nokia-backed Window phone, which analysts originally slated as an iPhone killer.

Unfortunately for the company's bottom line, Nokia said its net revenue from both mobile phones sales and its network divisions fell from €12.6 billion (£10.6 billion) in the fourth quarter of 2010 to €10 billion (£8.4 billion) during the same period in 2011, with smartphone sales dropping by 23 per cent.

On the bright side, Nokia is optimistic about its 2012 prospects. The Windows-powered Lumia 710 and Lumia 800 hit the market in Europe and Asia in November, and Nokia CEO Stephen Elop has said that "well over" 1 million have already been sold.

"From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful," Elop said.

"We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012."

Lumia phones may be gaining traction, but the company will undoubtedly face continue stiff competition from Apple's iPhone and Google's Android OS. Just this week Apple boasted record profits from its holiday sales of iPhones and iPads.

The company said it would not provide annual targets for 2012 as it was a "year in transition," but Nokia expects to "about break-even" in the first quarter of this year.

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