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Disastrous first quarter for Nokia

Disastrous first quarter for Nokia
The mobile manufacturer loses almost a billion euros over three months and sees its mobile sales collapse, even in emerging countries. A priori, it is no longer the world leader.

Nokia warned that its fiscal first quarter would be below expectations given the competitive environment of market and difficulties in smartphones. But the results are worse than the lowest ratings analysts. The period from January to March has been catastrophic for the Finn with a net loss of € 929 million while analysts had forecast 554 million euros.

Nokia recorded an operating loss of 1.34 billion euros against an operating profit of 439 million a year earlier and well below the 731 million loss expected by analysts. Sales for their part, fell 30% to 7.354 billion euros, a figure in line with analysts' expectations. 82.7 million devices were sold against 108.5 million in first quarter 2011.

According to Reuters, the giant is now the second world behind Samsung which have passed 88 million terminals in the period. This is the first time in 14 years that Nokia lost the crown of number one ...

The feature-phone no longer recipe, even in China
"These are times of great transition for the group in an industrial environment that continues to evolve and change rapidly," comments CEO Stephen Elop in the quarterly financial statement.

"During the past year, we have made great progress in our new strategy, but we faced a competitive higher than expected," he adds.

If the problem of Nokia in smartphones is known (Lumia effects of the new Windows Phone are expected), the novelty is that the group is also losing ground in the feature-phone, especially in emerging countries.

Nokia has passed 70.8 million of these traditional mobile cons 84.3 million a year ago. "We knew that Nokia was fighting on the smartphone market, now he must also fight in other segments. This decline is due to its poor performance in particular China, where local actors gaining momentum and where Android is more more popular, "said Malik Saadi, an analyst at Informa Telecoms & Media.

Serious business begins to get complicated for the manufacturer who must manage two fronts, that of the volume (which enabled him so far to save the day) and smartphones.

The Lumia struggling to take off
If Nokia sold 2 million Lumia, its smartphone sales overall fold of 51% (!) To 11.9 million units. He will have to multiply our innovations and launches with its partner Microsoft. On the other hand, Nokia needs time and must await the end of the year to make a true assessment of this strategy.

"We did better than expected in markets like the U.S., but it was more difficult to install a dynamic in other markets like the UK," said Stephen Elop.

"Clearly, the choice Windows Phone does not pay for the time against the iPhone and high-end models from Samsung. Sales remain below target in Europe and the world. Operators continue to sell more easily other platforms. On the other hand, the launch of Lumia 610 (entry level) in China could be a great opportunity to bounce back, "says Malik Saadi.

But time is running out. If the financial situation continues to deteriorate at this speed, the manufacturer could eventually become an affordable target for a competitor ... Further restructuring, and thus new job cuts are expected.


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