Over 2 Million Nokia Lumia Units but lower outlook for Nokia Devices & Services. Q1 report April 19.
Q1 2012 is looking very shaky for Nokia. The full Q1 report will be available on April 19th but a preliminary report shows things aren’t looking good at all.
We’ve said time and time again that we should look at Q2/Q3 to get a fairer look at Nokia’s position. Nokia doesn’t seem to be too positive about Q2 either. This is all very disappointing news what with a very positive response to the new Nokia Lumia 900 in America (which of course will have no effect on Q1 sales as it was only available in Q2).
Based on the preliminary view, Nokia ended the first quarter 2012 around the high end of our normal 4 to 6 week channel inventory range, but on an absolute unit basis, channel inventories declined sequentially.
It seemed things started picking up at the end of Q1 but not enough.
83M total units expected, 73M mobile phones and just 12 million smart devices (>2m being Lumia), so less than 10M Symbian devices totalling 4.2B net sales.
Ouch. Ouch. Ouch.
Espoo, Finland – Nokia today provided preliminary information on certain aspects of its first quarter 2012 financial performance, including a lowered first quarter 2012 outlook for Devices & Services. During the first quarter 2012, multiple factors negatively affected Nokia’s Devices & Services business to a greater extent than previously expected. These factors included:
- Competitive industry dynamics, which negatively affected net sales in the Mobile Phones and Smart Devices business units, particularly in India, the Middle East and Africa and China; and
- Gross margin declines, particularly in the Smart Devices business unit.The impact of these factors on the non-IFRS Devices & Services operating margin in the first quarter 2012 was partially offset by a significant benefit from lower warranty costs.
Updated outlook for Devices & Services for the first quarter 2012:
Nokia currently estimates that its non-IFRS Devices & Services operating margin in the first quarter 2012 was approximately negative 3 percent, compared to the previously expected range of “around breakeven, ranging either above or below by approximately 2 percentage points” primarily due to the factors noted above.Outlook for Devices & Services for the second quarter 2012:
Nokia expects its non-IFRS Devices & Services operating margin in the second quarter 2012 to be similar to or below the first quarter 2012 level. This outlook reflects that the first quarter 2012 benefit related to lower warranty costs is expected to be non-recurring, as well as expectations regarding a number of factors including:- competitive industry dynamics continuing to negatively affect the Smart Devices and Mobile Phones business units;
- timing, ramp-up, and consumer demand related to new products; and
- the macroeconomic environment.“Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition,” said Stephen Elop, President and CEO of Nokia. “Within our Smart Devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success. Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States.”
Additional commentary on the first quarter 2012 for Devices & Services and Nokia:
Nokia currently estimates that Devices & Services net sales in the first quarter 2012 were EUR 4.2 billion, comprised of Mobile Phones net sales of EUR 2.3 billion (71 million units), Smart Devices net sales of EUR 1.7 billion (12 million units), and Devices & Services Other net sales of EUR 0.2 billion. Based on the preliminary view, Nokia ended the first quarter 2012 around the high end of our normal 4 to 6 week channel inventory range, but on an absolute unit basis, channel inventories declined sequentially.Nokia currently estimates that Devices & Services gross margin (including Devices & Services Other) for the first quarter 2012 was approximately 25%, with Mobile Phones gross margin of approximately 26% and Smart Devices gross margin of approximately 16%.
In the first quarter 2012, Nokia sold more than 2 million Lumia devices at an average selling price of approximately EUR 220 (reported within the Smart Devices business unit). Furthermore, Nokia has seen sequential growth in Lumia device activations every month since starting sales of Lumia devices in November 2011. Lumia has gained market share with both distribution partners and consumers. The Windows Phone ecosystem is also attracting developers and has expanded rapidly with more than 80,000 applications available.
Nokia currently estimates that at the end of the first quarter 2012, the company’s gross cash and other liquid assets were approximately EUR 9.8 billion, and Nokia’s net cash and other liquid assets were approximately EUR 4.9 billion. The sequential decline in net cash and other liquid assets was driven by Devices & Services, which experienced unfavorable and mostly non-recurring net working capital changes as well as operating losses. Nokia Siemens Networks contributed positively to Nokia’s cash flow in the first quarter 2012 due to net working capital improvements. This was despite Nokia Siemens Networks having a preliminarily estimated non-IFRS operating margin of approximately negative 5 percent in the first quarter 2012, in line with the previously provided outlook.
Actions to Address Competitive Industry Dynamics Affecting Devices & Services
Nokia is quickly taking action. Nokia will continue to increase its focus on accelerating Lumia sales, as well as on lowering the company’s cost structure, improving cash flow and maintaining a strong financial position.- In the Smart Devices business unit, Nokia is increasing investments in Lumia to bring more products to more consumers in more markets.
- In the Mobile Phones business unit, Nokia is taking tactical pricing actions in the near term and plans to bring new products to market in the second quarter 2012.
- Nokia will accelerate planned cost reductions and will pursue additional significant structural actions if and when necessary.“We are continuing to increase the clock speed of the company,” said Stephen Elop, President and CEO of Nokia. “The change is tangible, and we are proud of the way Nokia employees are quickly responding to the needs of consumers and partners.”
Nokia will provide full first quarter results and more details when it reports its first quarter 2012 results on April 19, 2012.
Category: Nokia
About the Author (Author Profile)
Hey, thanks for reading my post. My name is Jay and I'm a medical student at the University of Manchester. When I can, I blog here at mynokiablog.com and tweet now and again @jaymontano. We also have a twitter and facebook accounts @mynokiablog and Facebook.com/mynokiablog. Check out the tips, guides and rules for commenting >>click<< Contact us at tips(@)mynokiablog.com or email me directly on jay[at]mynokiablog.comSubscribe
If you enjoyed this article, subscribe to receive more just like it.
Comments (654)
Trackback URL | Comments RSS Feed
Sites That Link to this Post
- Nokia numbers from today – there are still several ways to go | April 11, 2012
So “mighty” lumia(windows)phones sold 2 million( half of them donated on contract at at&t) and a “dead” os like symbian sold 10 million devices….and windows phone is still the main OS choice for nokia???
I know…maybe because this is just transition period ( i have a bad feeling taht is going to be a very long transition period!!!)
And guess why symbian didnt sold more ?…. maybe because Elop killed it in february 2011…
So Mr Elop maybe is time to elop-e(and take with you wp7.x , 8 os)
It would be interesting to learn where Nokia would have been now had everything worked out well and Anssi Vanjoki would have become the CEO of Nokia. I’m pretty sure Symbian would have sold much better (its sales were rising before Feb 11) and the MeeGo devices would have been selling just as well as the WP devices are now if marketed as much and Nokia would have been in a better financial position. Of course we’ll never know “what if”, but I liked Nokia better “Vanjoki style” than “Microsoft servant style”…
So Why not release the N9/N950 now? I don’t think it can do much more harm. These products were kept out of certain markets to pave the way for WP. If WP is as strong as they claim then, sales should putter along just fine. At least consumers have a choice. Nokia can also get some valuable feedback on how to march into the future.
I wish they’d also allowed QT to Finish (pun intended). Developers would have loved to have access to Symbian (there’s still a huge base), Meego Harmattan/Meltemi and possibly Android (theres the other half of the next billion from developer standpoint!) markets with little effort. That’s a huge base! And an easy way to drive support for all 4 ecosystems!
For now I say, bring back functionality that was lost it the transition from Symbian to WP and use that as a starting point.
Relationships have to have substance, pretty just isn’t good for more than a wild night.
["So Why not release the N9 now? I don’t think it can do much harm. These products were kept out of certain markets to pave the way for WP. If WP is as strong as they claim, then sales should putter along just fine. At least consumers have a choice. Nokia can also get some valuable feedback on how to march into the future."]
100% agreed.
jesus christ ,,ppl stop criyng like a pussy
ohh simbyan ..ohh megoo ,both of them are crap lol
)
is just ur brain that dosen.t accept change like is a monkey brain
wp is better at easy to use and speed ,,just missing more functionality but for average ppl the wp is amasing
example i have an n8 and a lumia 800 ..big difference
simbyan is like a fukin ancient o.s slow and buggy
soo ppl before u comment here at least use wp if not be fukin quiet
that,s why nokia is going down because of idiots like u hwo can.t accept the change and keep ur old school idealogy
bunch of virgin pussyes all of u
WP, the OSLO for monkeys?
I’d sniff your sneakers bro.
First of all…is Jesus Christ (if you have respect for Him)
Second …is symbian (not simbyan)….you should ask google!
Symbian and meego are not crap!….have you ever owned nokia n9 or nokia n900?.
Maemo is one of the best mobile version of linux(debian)…even without as many apps and games as your beloved wp7.5 os or android(i bet you had android before ).
With symbian and maemo you have freedom to do much more than on any other mobile OS.
Not everything is new, is also good.
About the monkey’s brain….i think people like you are perfect monkeys.
If market leaders(or nokia) will tell that windows phone is good ,than you will accept without asking many questions(so who is the monkey?)
About symbian beeing slow and buggy….have you ever tried symbian belle on your n8?…or you just talk/write senseless words?
I had nokia lumia 800 for 1 month , after i sent it back to vodafone and changed it with nokia 701.
Windows phone is having extremly limited functionality.
I used wp , so i do not have to be fukin’ quiet!
Nokia is going down because they dont listen the “voice” of its users / market….sometimes you have to listen “idiots”.
About the change!….Why Microsft replaced windows mobile with windows phone 7.x if their products are that good ?
Or…why wp7.x is selling not good even when they “donate” lumia phones on at&t contract?
I bet you are virgin and try to impress the girl you like with your(wp7) phone, but is not working! ,is not it?
Dont worry, monkeys can do many things with hands(like using wp7 os/phone)… do not be such a virgin!
I have used WP, Numbnuts. This is about arresting the decline in worlwide market share.
Besides if you HAD an N9 and switched to a Lumia 800, you’d be crying too..:)
^Says the little bitch?
well ,the storm is coming,nokia future is in risk, and remenber that the principal ,americans have the big money in nokia market in wall streets, so they give the way and no nokia by self, the capital are american (Found off Pensions) and they look different,for facts or going to lose much money or will stay in this root for long time to broke nokia and wait like xbox to grow again, is insane the decisions and Ceo still there
today more 4% down . elop! say somethings ,do somethings .
Hell no! Every time he opens his mouth – the share price plummets! The best thing for Nokia is for him to keep his mouth shut…
Ummm… actually, no. If you look at Nokia’s shares and sales, it was already plummeting, Elop simply inherited a company that was already failing. To the contrary, Elop actually injected a bit of hope in the company.
Nope not really, not at all, at least yet…
Things need to have dramatically changed by end of Q3 or no-one can argue any more that he was a good thing.
At that point it’ll be clear the strategy needed to be far more nuanced.
despite all the marketing $$$ and improvements, windows phone mango failed to migrate nokia’s customer base. tiles and metro generally alienates symbian users and are going the android camp. analysts and wannabe analysts here will always say, “stick with wp”. i’ve seen the smartphone market share and nokia is bleeding red even with all the restructuring and massive layoffs. the hard truth, sales of nokia mango handsets are not enough to sustain nokia. only deluded people will think otherwise. an excerpt from a news:
“No one comes into the store and asks for a Windows phone,” said an executive in charge of mobile devices at a European operator, which has sold the Lumia 800 and 710 since December.”
http://uk.reuters.com/article/2012/04/17/uk-nokia-telcos-idUKBRE83G08Z20120417
nokia needs to counter the low and mid end android handsets. this is where i see the current lumia range and the “all eggs in one basket” strategy are failing. they should have not cancelled the nokia 600. the full focus cameras are not helping either. if they got a complete and functioning meltemi, full touch s40 or “smarterphone” handset in the pipeline, they should release it asap to fight lower cost androids where lumia can’t compete in terms of pricing.
for me, N9′s swipe UI is better than mango. the camera ui on lumia 800 is small and limiting bcoz it’s overly simple. i can’t transfer files via bluetooth and sound quality totally sucks on headphones. to transfer songs, i need to install and even convert most of the videos using zune which is quite a hassle. while i just copy and paste with N9 and symbian via mass storage mode and most of it will play natively.
the philippines remains a nokia stronghold but im not sure for how long. nokia made a huge mistake in india when they released lumia and ignored what the ACTUAL market NEEDS. now if im not mistaking, this is what they are trying to do in china. good luck elop!
changing your car’s tires while running was a very BAD move. its about time they change the driver. please make mcdowell or marko ahtisaari the next ceo.
European carriers: Nokia’s Lumia smartphone “would be much easier to sell” if it ran Android
“No one comes into the store and asks for a Windows phone,” said an executive in charge of mobile devices for one European operator. “
http://www.zdnet.com/blog/hardware/european-carriers-nokias-lumia-smartphone-would-be-much-easier-to-sell-if-it-ran-android/19796
Nokia’s mounting troubles provide opening for rivals
http://www.thestar.com/business/article/1162540–nokia-s-mounting-troubles-provide-opening-for-rivals
Nokia fails to get powerful allies in Europe
http://timesofindia.indiatimes.com/tech/news/telecom/Nokia-fails-to-get-powerful-allies-in-Europe/articleshow/12702217.cms
I’m so sad about these news! Huhuhu!
Seriously @Grendell my friend is crying. His Lumia 800 is basicly iphone esque due to WM 7.5 as it cant bluetooth any files, cant tether, he cant reply to requesting menu eg. *111# then hit reply with “1″ as an option, IE9 doesnt open some sites, theres no opera mini etc.. And he couldive taken a e7 or the N9
Generally I do not learn article on blogs, but I wish to say that this write-up very compelled me
to try and do it! Your writing taste has been amazed me.
Thanks, very nice article.