Nokia: Lumia Windows Phone sales fall 28%, but losses are down too

Since Nokia abandoned its 'burning platform' in February 2011 to embrace Windows Phone and dramatically restructure its worldwide business operations, good news has been thin on the ground for the Finnish mobile giant. Sadly, its latest quarterly report isn't exactly packed full of happiness either.

There is some good news. The company's operating losses continue to fall, down from €826m EUR ($1.1bn USD / £670m GBP) in Q2 2012 to €576m ($755.2m / £467.5m) this quarter. That 30% reduction in losses comes despite a 4% decline in global sales to €7.24bn ($9.49bn / $5.88bn) over the previous quarter, a hint that the company's restructuring is starting to have some effect on its bottom line.

But there's yet more evidence of difficulties for the company's Windows Phone strategy, as Lumia sales fell by 27.5% from 4m units in Q2 to just 2.9m devices sold in Q3. The company's financial report framed this in the typically positive language one expects to see in such documents, stating that the decline in Lumia sales came "as we shared the exciting innovation ahead with our new line of Lumia products". But despite this positive spin, Nokia will surely be wondering whether customers really are waiting to get their hands on its next-generation Windows Phone 8 handsets - including the Lumia 920 (exclusive to AT&T for six months), Lumia 822 (Verizon), Lumia 820 and Lumia 810 (T-Mobile).

In North America, at least - where Nokia sales are pretty much exclusively made up of Lumia Windows Phones - the picture is far from encouraging. The table below indicates that devices sales across North America have collapsed by 50% over the previous quarter, falling from 600,000 sales in Q2 to just 300,000 last quarter.

Again, Nokia presented this as a partial consequence of its efforts to "prepare the distribution channel" for its new Windows Phone 8 handsets, but it acknowledged that the primary factor was "lower operator and distributor demand for Lumia". This will come as a devastating blow to the company, which has poured huge sums into its 'Operation Rolling Thunder' initiative to increase consumer awareness of its Lumia handsets. On the face of it, this effort appears to have failed.

The company's CEO, Stephen Elop, was quoted as saying that Nokia has "continued to manage through a tough transitional quarter for our smart devices business... The positive consumer response to our new Asha full touch smartphones translated into strong sales." Indeed, while its Windows Phone strategy is continuing to falter, news elsewhere in Nokia's device business was encouraging. The company announced an increase in its non-'smart' feature phone sales to 76.6 million units (up from 73.5m Q-on-Q), while its Series 40-based Asha handsets saw sales of 6.5m units worldwide.

The company's cash reserves fell, however, to €3.56bn ($4.67bn / £2.89bn), in spite of continued "platform support payments" and "software royalty payments" from Microsoft. Nokia stated that "year-on-year, net cash and other liquid assets decreased by €1.5bn ($1.96bn / £1.22bn) in the third quarter 2012", due primarily to restructuring and related expenses and a €742m ($972m / £602m) dividend payment in Q2.

Clearly, it's been another tough quarter for Nokia. It's still not seeing any significant traction in its Windows Phone strategy, and the considerable fall in sales of its Lumia devices - particularly in the US, where there's been massive expenditure on marketing activities - will no doubt be a kick in the teeth for the company.

But while it's been another disappointing quarter for Lumia, the company is seeing growth in its feature-phone business, and remains enormously popular in many emerging markets. That at least is cause for celebration, and an important reminder that Nokia isn't defined solely by how many Windows Phones it can sell.

But even so, Nokia will need to see some significant improvements in its Windows Phone strategy soon, and its ability to push those new Lumias to customers next quarter may prove to be a watershed moment for the company's smartphone aspirations.

Source: Nokia (PDF) | Images: Montara oil platform via Fotopedia; Stephen Elop image via The Guardian

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The reason the sales have been low is because only one carrier has a good model of the device. The 900 has been exclusive to ATT. They should bring it to VZW and T-Mobile as well.

ATT is the largest seller of Windows Phone devices because most businesses use ATT if they ahve employees that travel. GSM is the band to have. But making the device exclusive is pure prejudice. I wanted the orginal 900 and would ahve bought one if it came to Verizon, but it didnt. The 920 isnt coming either only the 820. I dont want the 820, I want the better model.

That si why sales are low. One carrier isnt going to be your breadwinner in the US. The Lumia is no iPhone.

The marketing in the US is also horrible. Stop spending time trying to diss the iPhone or Android phones. Just market on your merit. Show us what the device can do that si benefiticail. Sop using politics for commercials. It doesn't work.

Getting a Nokia 920 and a Microsoft Surface. Yellow for phone and blue for surface keyboard/cover. My den is going to look pimp.

We also have to remember, they're more than just phones.
When Oracle announced a switch to Nokia Maps it signified that Nokia will continue to be a big part of our lives, even if their phone business tanks.

I think most investors knew this was a lost quarter -- Nokia even said it expected results like this in its previous quarter's financial report, and analysts did as well. Windows Phone 8 is going to be the big test for them. Judging from Microsoft's tepid Windows Phone 8 release information and marketing so far, that may not be a good thing.

Of course sales are going to dip. Why buy into a non-upgradeable platform when Windows Phone 8 is just a few weeks away?

Xilo said,
Of course sales are going to dip. Why buy into a non-upgradeable platform when Windows Phone 8 is just a few weeks away?

Exactly. The biggest pain for Nokia has been that MS cut their existing phones off prematurely.

Xilo said,
Of course sales are going to dip. Why buy into a non-upgradeable platform when Windows Phone 8 is just a few weeks away?

Yeah, and it also doesn't help when due to that fact they don't release a new device for quite some time. I expect we'll see them move faster with WP8, we're already seeing more devices, 920, 822,820, 810... And there's still a whole 7xx line we haven't heard anything about. They could finally start doing that original 3 month release plan they talked about early on.

Symbian only became a burning platform when Elop, Nokia's CEO declared it so. With those words, he destroyed the company.

How can shareholders sit idly by and watch his complete ineptitude?

simplezz said,
Symbian only became a burning platform when Elop, Nokia's CEO declared it so. With those words, he destroyed the company.

How can shareholders sit idly by and watch his complete ineptitude?

Because they got more brains than you do. Simple.

alwaysonacoffebreak said,

Because they got more brains than you do. Simple.

Really? Announcing that your main platform is dead.... one year before the launch of the new one (WP7) is smart?

Fritzly said,

Really? Announcing that your main platform is dead.... one year before the launch of the new one (WP7) is smart?

Symbian had been dead long before he announced that. Investors needed to know that they had a new plan. If they were to continue with Symbian, it would had destroyed Nokia most likely. Too much catching up with iOS and Android.

Thinking ahead is smart. If it pays of is another discussion.

x-byte said,
Symbian had been dead long before he announced that. Investors needed to know that they had a new plan. If they were to continue with Symbian, it would had destroyed Nokia most likely. Too much catching up with iOS and Android.

Thinking ahead is smart. If it pays of is another discussion.

"The company announced an increase in its non-'smart' feature phone sales to 76.6 million units (up from 73.5m Q-on-Q), while its Series 40-based Asha handsets saw sales of 6.5m units worldwide."

The "dead" division seems to be kicking, doesn't it?
Besides what Elop did was not just announcing a new strategy, he intentionally burned all the bridges behind the company locking it in the WP7 hug with no way out. And he did it well aware that for several months the company would not have any device based on the new OS available.

Edited by Fritzly, Oct 19 2012, 5:58am :

Fritzly said,

"The company announced an increase in its non-'smart' feature phone sales to 76.6 million units (up from 73.5m Q-on-Q), while its Series 40-based Asha handsets saw sales of 6.5m units worldwide."

The "dead" division seems to be kicking, doesn't it?
Besides what Elop did was not just announcing a new strategy, he intentionally burned all the bridges behind the company locking it in the WP7 hug with no way out. And he did it well aware that for several months the company would not have any device based on the new OS available.

There is less profit in feature phones, than there is on smart phones. The FUTURE is not feature but smart. So Nokia had to go to an OS that is built for smartphones. They were late to the party. The one mistake that they did was not have a dual OS strategy - Android and WP8. Having Android phones for the last couple of years and then jump to WP8 now would have ensured sales would have been higher than simply sticking with WP7. That's my opinion.

First: Title could be written better "Nokia: Lumia Windows Phone sales fall 28% and losses are down too".

Second: The Exclusivity of the Lumia 900 and 920 on AT&T doesn't help Nokia's cause.

WalterEgo404 said,
First: Title could be written better "Nokia: Lumia Windows Phone sales fall 28% and losses are down too".

Second: The Exclusivity of the Lumia 900 and 920 on AT&T doesn't help Nokia's cause.

I dunno though, part of the deal with AT&T is that AT&T will actually market and promote the Lumia line itself, it did so with the 900. I think otherwise they might not do so and could just place the phones in some part of the store and let them sit there.

It also seems the 920 is going to be exclusive for 6 months? This adds to the 922 rumors for Verizon.

GP007 said,

I dunno though, part of the deal with AT&T is that AT&T will actually market and promote the Lumia line itself, it did so with the 900. I think otherwise they might not do so and could just place the phones in some part of the store and let them sit there.

It also seems the 920 is going to be exclusive for 6 months? This adds to the 922 rumors for Verizon.


It is a little late in the game for Windows Phone to have exclusivity rights. They need to put that Lumia 920 everywhere at launch. Just my opinion as a Verizon customer.

WalterEgo404 said,

It is a little late in the game for Windows Phone to have exclusivity rights. They need to put that Lumia 920 everywhere at launch. Just my opinion as a Verizon customer.

I agree with you but I think it's more that AT&T wanted it more than anything. Nokia would want to sell it's devices to everyone I'm sure.

GP007 said,

I agree with you but I think it's more that AT&T wanted it more than anything. Nokia would want to sell it's devices to everyone I'm sure.


I'm sure you are right. After they lost the exclusivity on the iPhone, AT&T wanted the next big thing that is not available everywhere. I think this deal is good for Nokia but not to the general consumer who doesn't have it on AT&T. But the bright side, HTC will most likely be available on most carriers here in the US.

It's too early to judge Nokia's strategy. After all, WP8 is the real launch of Windows Phone alongside its tablet and desktop brothers. WP7 was really little more than a preview of this unified interface strategy which Microsoft had coming all along. Windows Phone's true strengths come to light when part of a unified ecosystem that, as far as the general public is concerned, hasn't even been promoted yet. If in two to three years when Windows 8 has lots of popular apps and is well known, and everyone's phone contracts have had a chance to expire, *then* we can step back and see whether or not people have taken to Windows Phone.

You can hardly blame people for not buying Windows Phones when the ones that people might actually want are not even available to buy yet...

50% of corporations that run BB servers are dumping them in favor of WP8. Windows 8 will be a big driving force for WP8. If I were you I would hold on for another year.

Gungel said,
50% of corporations that run BB servers are dumping them in favor of WP8. Windows 8 will be a big driving force for WP8. If I were you I would hold on for another year.

And... 87% of all statistics are made up on the spot.

Gungel said,
50% of corporations that run BB servers are dumping them in favor of WP8. Windows 8 will be a big driving force for WP8. If I were you I would hold on for another year.

650% of comments posted provide no source or reference.

Gungel said,
50% of corporations that run BB servers are dumping them in favor of WP8. Windows 8 will be a big driving force for WP8. If I were you I would hold on for another year.

where in the hell did you make up that news?? oh wait let me make up one. 0% enterprise is planning to use wp8 as their mobile provider.

Gungel said,
50% of corporations that run BB servers are dumping them in favor of WP8. Windows 8 will be a big driving force for WP8. If I were you I would hold on for another year.

Source please?

still1 said,

where in the hell did you make up that news?? oh wait let me make up one. 0% enterprise is planning to use wp8 as their mobile provider.

I wasn't aware that Windows Phone 8 was a mobile provider.

- Sent from my Verizon Galaxy S3 on the Android Network

Timble said,
It's too early to judge Nokia's strategy. After all, WP8 is the real launch of Windows Phone alongside its tablet and desktop brothers. WP7 was really little more than a preview of this unified interface strategy which Microsoft had coming all along. Windows Phone's true strengths come to light when part of a unified ecosystem that, as far as the general public is concerned, hasn't even been promoted yet. If in two to three years when Windows 8 has lots of popular apps and is well known, and everyone's phone contracts have had a chance to expire, *then* we can step back and see whether or not people have taken to Windows Phone.

You can hardly blame people for not buying Windows Phones when the ones that people might actually want are not even available to buy yet...

It mgiht be too soon to judge if you look at just smartphones, though a dive in Q3 was expected imo, they had no new devices out since the 900 back in June. But overall they've managed to keep cutting down their loses which is the goal overall. So it seems the restructuring plan is working, and realistically it wasn't going to happen overnight either. If Q4 sees that loss drop yet again then I'd say 2013 should be a bright year for them, they could break even in Q2 of 2013 and start making a profit in Q3.

I skipped the WP7 devices because it was a new platform, also because at the time they came out I'd not long purchased a SGS2. I am however desperate to get a new Lumia 920 now... just wish they'd hurry up and announce the release date, price and pre-order info.

I'm sure many others are waiting for this new generation too, hence why sales have fallen of previous gen devices.

Holding out for Windows 8 phones now. I recently bought a 7.5 device and it was a tough call between the cheaper Lumia and the HTC Mozart and the Mozart came up on offer so I bought that.

TBH I reckon I'll end up going for the HTC 8S too rather than the Lumia 820... will have to see!

Wow, someone's a troll. Pictures of "a burning platform" and "lumias bombing". I wonder why so many non windows phone users hate windows phone?

Invizibleyez said,
Wow, someone's a troll. Pictures of "a burning platform" and "lumias bombing". I wonder why so many non windows phone users hate windows phone?
Why does haters=non windows phone users?

Invizibleyez said,
Wow, someone's a troll. Pictures of "a burning platform" and "lumias bombing". I wonder why so many non windows phone users hate windows phone?

The 'burning platform' is a reference to Stephen Elop's own words.

The image of Lumias being dropped from an aircraft isn't "Lumias bombing" - it's a reference to "Operation Rolling Thunder", and is a graphic that I created for this article: http://www.neowin.net/news/rol...umia-900-pre-orders-open-up . If you don't know what Operation Rolling Thunder is, I suggest you look it up.

I own three Windows Phones - a Samsung Omnia 7, which I purchased on day one of its availability, and which has been my primary device since then; a Nokia Lumia 800 and Nokia Lumia 710.

So, what was your point again...?

gcaw said,
So, what was your point again...?

Not to start a huge fight here, but it never occurred to you it might be prudent to add a line of text underneath the pictures explaining the reader what they're looking at?

it is not the readers responsibility to be careful what they assume so much as it is the writers/illustrators responsibility to make sure what they come across as is unbiased and neutral. Unless you want to be biased.
In an article regarding slower sales of Nokia lumia windows phones you pic a picture of a burning platform which you say was to reference elops quote about Symbian, not windows phone. The chart was good informative data. Then you pick a plane bombing with Nokia lumias, which kinda fits your rolling thunder argument a little, but still seems very negative. Lastly, you picked a good pic

zeke009 said,

I'm sure it'll be revised to state, "I shouldn't assume anything anymore".

duddit2 said,
Not a big surprise really, its all about windows phone 8 devices now.

yeah but i remember Nokia CEO saying that sales of Lumia are flat... 28% down is flat??

and dont forget the people who argued that Nokia CEO is right.