...by turning a profits warning into a total rout. The Finnish company has undershot last year's fairly abysmal (by its then standards) first quarter profit of €439 million by turning in a staggering €929 million loss for the first quarter of 2012. By Ian Scales.
And there will be no improvement any time soon. By Nokia's own admission we can expect the same (read even worse) results for the next quarter.
The ex-Finnish giant's catastrophic decline has accelerated since it announced its Microsoft alliance a year ago. That has predictably failed to return the company to health in the smartphone segment since the platform hasn't yet gained traction and the mixed response to Nokia's Lumia hasn't improved its prospects of doing so. (see Nokia's waking nightmare continues).
But what is astounding is that the mishandling of its smartphone business seems to have spilled over into the rest of the company's handset operations. It has now completely lost its way with the featurephone segment of the market as well.
While the Nokia loss has been sharpended by resturcturing charges, underlying sales have tanked as well. Net sales last quarter fell to €7.35 billion, down 29 per cent from the same period last year.
Net cash also fell by a quarter to €1.5 billion.
CEO Stephen Elop blames "greater than expected" competitive challenges for the car crash. He appears to believe that it's all about transitional difficulty and he talks of making some adjustments.
On Lumia he says that despite it being a great phone (awards, acclaim etc) actual sales results have been mixed: "establishing momentum in certain markets including the UK has been more challenging," he explained. You can say that again.
What about the other phones? "The lower price tiers of our industry are undergoing a structural change, and traditional feature phones are challenged by full touch devices." Yup, we all knew that would happen years back.
The solution is to strengthen the Series 40 platform and strengthen the line-up next quarter. Gaps are to be filled.
Elop promised further cost cutting. In addition to this 'resturcturing' one prominent head has fallen. The sales team is getting a revamp and Elop announced that Colin Giles, executive vice-president of sales, would be leaving the company at the end of June.
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