Nokia Sees 30 Percent Drop in Feature Phone Sales For Quarter
Elop highlighted the Lumia portion of its smart device segment where unit volume grew sequentially to 5.6 million units, with roughly two-thirds of Lumia volumes accounted for by Windows Phone 8-based devices. While Lumia product sales grew 27 percent over Q4 2012, overall smart device volume fell 49 percent from Q1 2012 to 6.1 million units, said an earnings release. In Q1, Nokia shipped half a million Symbian devices, said Chief Financial Officer Timo Ihamuotila, “down significantly” from Q4.
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Lumia sales grew in all regions except for North America, Ihamuotila said. Nokia is planning a high-profile Lumia rollout in the U.S. later this quarter, said Elop. The phone will have the kind of “hero status” necessary for high-end handsets to attract “premium subsidies and additional marketing investment” in the U.S., he said. Nokia, Microsoft and operators have committed to increase the global Windows Phone marketing budget for Lumia, he said, including major marketing campaigns, retail associate training, leveraging operator marketing resources and “seeding more live devices to create a more engaging point of sale experience.” He cited the company’s rollout of the Lumia 920 with AT&T last fall as a model.
Commenting on market trends, Elop said, “The distance between the various Android participants seems starker than ever before as the dominance of one hardware vendor becomes more visible.” Elop said “unbranded” and “forked” Android players from China and India are “creating new dynamics” in the market in and outside of Asia, resulting in “low-priced, fragmented” versions of the Android experience at the low end of the price range.
Elop highlighted emerging “startup alternative platforms” that appeared at Mobile World Congress in February from new entrants “placing bets on next generation technologies like HTML5.” None of the platforms has gained broad scale, he said, “but we should not underestimate what could happen if a dominant Android provider shifts some of its focus to an alternative platform.” Other forces threatening to “disrupt existing business models” include Facebook’s Home app and Amazon’s Kindle tablet that “forks the Android stack,” which Elop referred to as “deliberate steps to change Android and possibly disrupt our industry.”
First-quarter revenue of 5.9 billion euros was down 27 percent from Q1 2012, the company said. Shares of Nokia dropped 11.5 percent Thursday to $3.17.