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(Pocket-lint) - Nokia has published its interim financial report for Q2 2013 and the firm seems to be stabilising, posting a dramatically smaller loss year-on-year. Last year, the company reported a loss of 824 million euros, this time around that's down to 115 million. It's still in the red, but signs are that things are improving.

That is thanks in no small part to the rising belief by the consumer in Windows Phone 8 and the Finnish manufacturer's Lumia phones. Nokia sold 7.4 million Lumia smartphones worldwide in Q2, a year-on-year rise of 32 per cent. It seems that many of those were at the more affordable end of the market, with the company's net sales of "smart devices" raking in 1.164 billion euros in comparison to 1.541 billion for the same period last year. But it's a massively positive sign in the race for third spot in the operating systems stakes.

BlackBerry has already slipped behind Windows Phone 8 in the first half of this year, and with more Nokia devices in people's hands that might provide the impetuous for developers to get their applications ported over to the platform. Apps are still the thing most users cite as a reason for adopting a certain type of phone and this could be telling in that regard.

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One slipping market for Nokia concerns feature phones: net sales of non-smart mobile phones have fallen 39 per cent year-on-year from 2.291 billion euros in Q2 2012 to 1.405 billion euros in 2013. There's no surprise there really, and Nokia will be looking to fill that space with more Asha and budget Lumia handsets in the coming months, we understand.

"Towards the end of the second quarter, we started to ship the Asha 501, which brings a new design and user experience to the highly competitive sub-$100 market," said Stephen Elop, Nokia CEO. "While we are very encouraged by the consumer response to our innovations in this price category, our mobile phones business unit is planning to take actions to focus its product offering and improve product competitiveness.

"We are very proud of the recent creations by our Lumia team, from the Lumia 520 - our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam - to the Lumia 1020, our star imaging product which we unveiled to the world last week.

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"Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our smart devices revenue."

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Writing by Rik Henderson. Originally published on 18 July 2013.