Nokia's phone sales drop 30 percent in its last quarter

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.

Nokia stated:

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.

Source: Nokia

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38 Comments

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Just remember this before jumping to conclusions:

The company chose not to offer any specific unit sales numbers for its phones.

Meaning it could have been caused by anything - a rapid decrease in basic handsets but a failure by Nokia to grab bag that customer with their own smartphone offering. Hopefully we'll see soon a break down of the sales as to find out where the reduction in sales took place.

Photogenic? Most of the Android commercials I remember are those stupid CGI liquid metal flying around pointlessly to look cool and say "DROID!" which had nothing to do with anything other than sounding high tech.

They haven't released a phone that I want to buy right now on AT&T. They should stop with the carrier exclusive variants on strange release schedules. The 930 is nice but there's no info on when it'll come out for carriers here and by the time it comes out, the phone will basically be 6 months old (it's basically the Lumia Icon, which came out a while ago).

They need to get it together... 8.1 is a great step forward but they need hardware to move along with it.

Not surprise at all. They haven't release any new phone on any carrier besides the Icon on Verizon which does nothing for Nokia until they release phones for T-Mobile and At. Sprint needs to be bought out.

That's a shame, I just got a couple of Lumia 520's (one hundred pounds in the UK, SIM free too) for work
and they are actually pretty good, the build quality is far better than any Android £100 pound mobile I have come across and piece of cake to setup too

Nothing is a shame, everything is just fine, and "4.1% market share" as some here are trying to make it seem low, is actually amazingly high for Windows Phone with all things considered. It's only going to rise, considerably. And yes, Lumia 520 is far better than the horrible low-end Android devices, but you'll still see ridiculous comments like "better low-end handsets from competitors" here. Yeah, freaking right. Not to mention, even Lumia 520 is going to get the 8.1 update, which is huge. Eh, whatever, people love being pessimistic.

I can't say I'm that surprised. The dip is a culmination of several different problems.

- 8.1 still not released through carriers
- No high-end 4-4.7 inch handsets
- Better low end handsets from competitors
- Nokia deal closing several months late
- Which lead to lukewarm advertising of Lumia handsets
- Limited devices available on non-AT&T carriers

Hopefully things can improve now that Microsoft is in charge. Their massively superior bank account means Microsoft can offer better low-end devices at similar price points. Having Nokia's software team should improve development time and push out new apps/updates faster. Microsoft can (and should) start another multi-billion dollar marketing campaign. And with Nokia's manufacturing plants, Microsoft could even entice other OEMs by offering to produce WP handsets for them. I'm not sure what Microsoft can do about the carriers being overly selective (especially Verizon and Sprint). I would suggest Microsoft expand their offerings on smaller carriers and build from there.

and the worst thing..they will do nothing like you are posting here...they will keep the status quo doing as much as needed to keep their sorry marketshare numbers, delaying the updates, don't allocating enough resources & investing on the Nokia side and squandering the momentum gained by Nokia in 2013.

Figure 8 Dash said,
I can't say I'm that surprised. The dip is a culmination of several different problems.

- 8.1 still not released through carriers
- No high-end 4-4.7 inch handsets
- Better low end handsets from competitors
- Nokia deal closing several months late
- Which lead to lukewarm advertising of Lumia handsets
- Limited devices available on non-AT&T carriers
.

The 930 is 5 inch high end phone dont think theyll have a 4.5inch one or someat. The 930 looks stunning and thats the phone im getting next, just waiting for it to be released and on O2

psionicinversion said,

The 930 is 5 inch high end phone dont think theyll have a 4.5inch one or someat. The 930 looks stunning and thats the phone im getting next, just waiting for it to be released and on O2


Its not a US phone!

How much of that is due to their feature phones tanking still? Hard to know without a breakdown but I'm willing to bet most of that 30% is off of feature phones. Not saying there's no dip in Lumia sales, there is, hard not to with nothing new. The 930 and a 830 should've been out already if things were done right. Doesn't help that WP8.1 was slow to market, so Q1 is pretty much just a flat quarter and always sees a dip in sales because it's after the holidays.

I'm hoping now that MS has control they can handle these phone releases better and quicker, it's taken long to see new Lumias hit lots of markets.

I still blame a lot of this on the carriers. All with in a block of where I work, there are Verizon, AT&T, and Tmobile stores. I have to make frequent visits for those store. The Windows phones if they have them are in the back most section of the stores, in some cases, not even present. The Tmobile reps couldn't answer any questions about Windows Phone either. I guess also what pisses me off the most about this, is that the carriers seem to go out of their way for exclusive Nokia phones, then they don't even try to sell them in the store or at least present them in a sellable way

Those tiles in the picture above are unattractive to the average consumer, and myself. It's probably all a consumer would notice at a store. An SIII next to it would look far more attactive.

I waited a whole year to see what 8.1 would offer (hopefully based on user feedback). Unfortunately, the single color on a black or white background theme remains. Then again, many people on here have fallen in love with it...

68k said,
Those tiles in the picture above are unattractive to the average consumer, and myself. It's probably all a consumer would notice at a store. An SIII next to it would look far more attactive.

I waited a whole year to see what 8.1 would offer (hopefully based on user feedback). Unfortunately, the single color on a black or white background theme remains. Then again, many people on here have fallen in love with it...


Everyone listen to 68k! The spokesperson for the average consumer! He has drilled down into their innermost thoughts and knows what their likes/dislikes and preferences are! He makes millions and millions of dollars from every company in the world that just wants to know what the "average consumer" likes and wants!

I must not be an average consumer, I bought my first Windows phone based purely on the tile interface (and how fast it was at the time). It's what keeps me around, too.

I think the Windows Phone OS is not photogenic and harder to advertise.
It's hard to see in a static image how fluid, and easy to navigate it is.
MS should be pushing in stores (where possible) and online any method showing the OS in use.

And it's easy to see in an image how "fluid and easy to navigate" iOS and Android are? No, it isn't, at all. And there's such a thing as video.

audioman said,
And it's easy to see in an image how "fluid and easy to navigate" iOS and Android are? No, it isn't, at all. And there's such a thing as video.

I've never seen the real impact of advertising vs actual impact touching / using a Windows Phone 7/8. The different between personal experience and all the advertising were pretty significant.

Google not selling android of it's UI per say, and have come a long way from Andriod 2x to 4x phones. Apple was the success to bringing it to mass market.

Looking at static picture of windows phone just convey's icons. I do believe MS has to rely on less exposure of different marketing (video, active demo's in store's).

68k said,
Those tiles in the picture above are unattractive to the average consumer, and myself. It's probably all a consumer would notice at a store. An SIII next to it would look far more attactive.

I waited a whole year to see what 8.1 would offer (hopefully based on user feedback). Unfortunately, the single color on a black or white background theme remains. Then again, many people on here have fallen in love with it...

Agree

68k said,
Those tiles in the picture above are unattractive to the average consumer, and myself. It's probably all a consumer would notice at a store.

Agree. The dummy phones that operators put out to represent the phones are the worst thing to happen to Windows Phone adoption.

I mean looking at static tiles make it look horribly dumb. Handing my 1020 over to an average user and all of a sudden their opinion changes.

They are doing OK for third place, if they were doing well... They wouldn't of sold their devices and services etc to Microsoft. companys doing well just don't UP and sell a core part of their business

Now that Microsoft owns the aspect of Nokias business that matters to them they can Focus on building some groundbreaking innovative devices combining patents and assets of both entities into something really cool hopefully

We saw what Nokia was able to produce going it alone with the support of Microsoft now we get to see where they go under the same umbrella

If you're surprised you just aren't paying attention

dingl_ said,
They are doing OK for third place, if they were doing well... They wouldn't of sold their devices and services etc to Microsoft. companys doing well just don't UP and sell a core part of their business

Nokia is a distant fourth in the smartphone market, with just 4.1% market share.

The reason for this drop is that most of Nokia's sales were from feature phones, which are fast dying off.

Well... They didn't have any major new releases in OS or handsets and most people who would upgrade are waiting for the 8.1 devices. I think a drop in revenue is to be expected.

Drewidian said,
Well... They didn't have any major new releases in OS or handsets and most people who would upgrade are waiting for the 8.1 devices. I think a drop in revenue is to be expected.

Agreed. While I'm happy with 8.1's preview, the simple fact is not having 8.1 handsets for the holidays, or at least promoting it, really hurt.

Also, loathe am I to say it, most consumers look at specs and models, so most WP phones are looking a bit long in tooth. I'm sure the sale of Nokia to MS worried some potential buyers as well.

Agree also.

Plus they've concentrated on niche handsets (1020, 1520) or the ultra low end 520.

Meanwhile, the mid range of the 620, 720 and 820 has seen nothing at all in terms of proper successors. And no the badly named 630/5 doesn't really count as a 620 successor, nor the 625.