Nokia struggles as move to Windows Phone hits bump in the road
Nokia has announced its latest financial results and it's not good news. The company has filed a $1.2 billion loss in the past three months as the pain of switching to Windows Phone 7, Microsoft's phone operating system, continues.
Although Nokia has said that its Lumia 900 and Lumia 800 devices have had a strong start - 2 million sold and counting - sales of the company's cheaper Symbian-powered handsets in developing countries are falling off more sharply that expected.
The problem has been further compounded by Nokia deciding to write off the cost of the entire switch to Windows Phone, drawing a line in the sand - meaning that the results are even worse that analysts predicted.
"We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges," said Stephen Elop, Nokia's CEO.
The manufacturer is hoping that the launch of the Nokia Lumia 900 in the US over Easter, and in the UK at the end of April, will mean that the next quarter's results aren't as bad.
"We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim," Elop added. "The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging."
Earlier in the week, Reuters reported that customer interest in the smartphones was still lacklustre even though those that eventually buy the phone quickly become evalanglists for it.
The latest results show that Nokia had hoped that the transition from Symbian to the Windows Phone operating system would be smoother, but perhaps, by seeing a weakness, other manufacturers have taken advantage of the situation.
In recent weeks, Research In Motion, Samsung, ZTE and Huawei have all started launching budget handsets in countries such as Brazil, India and China. These also offer considerably more power than the Symbian handsets traditionally sold to those markets.
That, combined with a "growing up" of the smartphone user to something that offers a little more "oomph", means that Nokia could have the rug from its "cash cow" pulled out from under it if the company doesn't act quickly.
The next six months are looking more critical than ever for the Finnish smartphone manufacturer.
Pic: (cc) Forum PA