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Q2 2012 Nokia Losses Announced, More Windows Phone Devices Coming?

By Jonathan Charles | Jul 19, 2012 12:27 PM EDT

Nokia reported more losses just moments ago, covering the second quarter, as the company continues to struggle despite partnering with Microsoft to develop Windows Phones. Earlier in 2012, Nokia lost its numero uno status in the smartphone world to Samsung.

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Nokia failed to gain traction with its Meego and Symbian operating systems, effectively abandoning Meego and the first and last device for the operating system: the Nokia N9. The result is that Apple, with iOS, and Google, with Android, dominate the smartphone market.

Nokia revealed a total operating loss of €826 million (approximately $1 billion). The company lost €1.3 billion ($1.5 billion) during Q1 2012.

Despite the Nokia Lumia 900 Windows Phone selling around four million units, Nokia announced, it's little compared to the iPhone 4S and Android devices such as the Samsung Galaxy S3. It's strange because surveys revealed customer satisfaction is high among consumers.

According to Reuters, analysts predicted Nokia sold four million Windows Phones during Q2 2012. Apple and Samsung are expected to sell 30 million and 50 million smartphones, respectively.

Nokia has made massive employee cuts, which is due to its credit rating being downgraded to "junk" with one in five leaving the company.

"Fears have been elevated to a level that may be greatly detached from reality. The most interesting [information] will be to see what the company says about the second half," Nordea analyst Sami Sarkamies said to Reuters. Nokia revealed it expects performance in Q3 2012 to be similar to previous quarters, and cited difficulties due to "product transition."

Microsoft is launching Windows Phone 8 later in 2012, the next-generation version of its mobile operating system. This version of the operating system won't fully support Windows Phone 7 devices such as the Lumia 900. Windows Phone 8 uses the Windows NT Kernel, so the extent Windows Phone 8 arrives on Windows Phone 7 devices is through Windows 7.8's new start screen.

Reuters also reported that before the announcement Nokia's loss was expected to be around €706 million, which is double its previous loss. Apparently, the company has spent €2.1 billion euros. At this rate, according to Reuters its cash reserve, €4.9 billion euros, could be gone in a couple of years.

Nokia recently cut the Lumia 900's price to $49, sparking speculation the company is trying to stimulate sales with Windows Phone 8 approaching. Nokia reiterated the pricing is "normal strategy" to get the device to more consumers, despite retailing for $99 on a two-year contract originally for AT&T.

With its Windows Phone 7 devices effectively frozen out of Windows Phone 8, it seems logical to suggest that Nokia will announce new Windows Phone devices later in 2012.

 

 

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