The mobile phone division at Nokia took a big hit in its last fiscal quarter. The company revealed today that sales of its phones went down 30 percent in the first quarter of 2014, compared to the same period a year ago.
Nokia has seen some sales progress in the last few quarters from its low cost Windows Phones like the Nokia 520, along with its Asha feature phone family. However, the latest numbers show that the devices division had revenues of €1.93 billion ($2.68 billion) in the first quarter, compared to €2.77 billion ($3.84 billion) from the same period a year ago. The company chose not to offer any specific unit sales numbers for its phones.
On both a year-on-year and sequential basis, our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio. Our Smart Devices net sales were affected by competitive industry dynamics including the strong momentum of competing smartphone platforms.
In other words, budget smartphones, which are likely using Android, took much of Nokia's phones sales away last quarter. It's a situation that is now in Microsoft's hands and it will have to make some moves rather quickly to stop that device sales decline.
Overall, Nokia generated a profit of €240 million ($332 million) for the first quarter of 2014 and now that it doesn't have to deal with its phone division it could make even more money in the future with its remaining businesses, including its HERE mapping services.