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Nokia Records Loss Of Almost €500 Million

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Nokia Q2 2011 results

The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011.”

This is the opening line of a statement from Nokia’s CEO Stephen Elop at the reporting of Q2 2011 financial results. For many it will sum up the feeling that Nokia just doesn’t get it in terms of smartphones and is consistently being left behind by competitors.

In Q2 Nokia made a net loss of €487 million compared to a profit of €295 million a year before. This was far higher than the  losses of around €1.5 million predicted by analysts. Nokia sold 16.7 million smartphones in the quarter which represents a huge drop of 32 per cent compared to the same period last year. Overall mobile device sales fell to 88.5 million units, a 20 per cent drop from 111 million in the same period last year.

Nokia Q2 2011 results

Sales for the group in the three month period were €9.3 billion, down 11 per cent from €10.4 billion in Q1 2011 and a fall of seven per cent compared to Q2 2010. Mobile device sales fell 23 per cent to €5.47 billion from €7.1 billion in Q1 2011, with a fall of 20 per cent year-on-year.

Elop said in his statement that Nokia took steps in Q2 to manage the inventory build-up reported in Q1. Those “steps” have been widely reported as Nokia simply slashing the prices of it handsets. Elop spoke of a “time of transition” when Nokia expected competitive pressures to continue but that the company had a “clear strategy” about where it was going in the future.

Nokia Sea Ray

The one area where most Nokia people are pinning their hopes is the Windows Phone project. Elop confirmed in his statement that the first device (probably the oft-seen Sea Ray - pictured above) will arrive at some point this year: “Step by step, beginning this year, we plan to have a sequence of concentrated product launches in specific countries, systematically increasing the number of countries and launch partners.”

It is another poor set of results for Nokia and there is no denying that the company is in serious trouble. However, Elop and his fellow executives, continue to remain positive about the future: ”Thus, while our Q2 results were clearly disappointing, we are executing well on the initiatives that are most important to our longer term competitiveness.“

We await the first Windows Phone handset from Nokia eagerly but we remain skeptical as to whether this will be enough to re-establish the Finnish company at the top of the smartphone pile.

Source: Nokia

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