updated 08:50 am EDT, Wed April 11, 2012
Nokia predicts dire Q1 esults
Nokia sent out a warning on Wednesday that its results for the first quarter of 2012 would be worse than expected as its smartphone sales continued to struggle. Its operating margin would now be down by three percent instead of flat, while that for the just-started spring quarter would be similar or lower. "Competitive industry dynamics" and tighter profit margins were to blame, Nokia said, making clear allusions to fiercer competition from Android and the iPhone.
While improving versus the million-plus units of the fall, Windows Phone sales weren't growing quickly enough to offset plunges for Symbian devices. Nokia is now known to have moved two million smartphones in the first three months of 2012, which is commonly believed to be dominated by the Lumia 800, but is still largely depending on its outgoing OS for the core of its sales. CEO Stephen Elop still saw it as part of a gradual shift.
"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," Elop claimed.
Among some of the strategies to bolster its performance, Nokia was both "increasing investments" to both grow the Lumia line and put it in more countries, as well as to invoke "tactical pricing actions" for its S40 feature phones as new phones came into play. The Finnish firm would speed up cost-cutting measures and might undertake "significant structural actions" if necessary, implying added job cuts.
Windows Phone sales are likely to go up in the spring following the launches of the Lumia 900 and Lumia 610. The lowered forecast could still see Nokia bleed more market share again and dash Microsoft's hopes of buying a larger position for Windows Phone through its multi-billion dollar Nokia deal.