Nokia’s Quarter Results Round The Corner, Company Feeling The Heat Already

Posted on Apr 19 2012 - 10:32am by Editorial Staff

With Nokia’s quarter results just round the corner and what it appears to be that the company’s CEO Stephen Elop will be under pressure in order to convince investors that the Finnish mobile company is still capable to make its will in the market. The company recently announced that it has lowered its first-quarter 2012 outlook for the key Devices and Services business unit. Stephen Elop, President and CEO of the company, called the financial results for Q1 2012 ‘disappointing’. As soon as the news spread the company sees its share 19 percent lower.

With such conditions ailing over the mobile giant head resulting in investors start losing faith that it can even break the vicious circle that keep customers and in turn application developers from its new phone. The company last year ditch its own symbian phones and joined hands in order to adopt Windows Phone. What disappoints the most here is that company says it sold more than 2 million Lumia units – if it did so, does the results has to be disappointed or do somehow the role of Microsoft and Windows partnership too in this.

“Nokia should have bet on Android. That would have been a powerhouse in terms of mobility, search, etc,” said one telecoms industry executive who has done business with Nokia for years. “Elop had one bet to make and he made the wrong bet.”

“Windows Phone provides Nokia with an attractive and vital point of differentiation,” said Jo Harlow, chief of Nokia’s smartphone business. “We are building something exciting. People who try a Lumia device are telling us loud and clear that they love the Windows Phone experience.”

“Windows is a great operating system, but it seems that customers aren’t buying it,” said Juhani Risku, a former innovation chief at Nokia, who left in 2009 and is now a designer and analyst. He is one of Nokia’s most vocal critics. “It is dangerous to go only with one system, even more so when it’s not your own.”

Talking about the Lumia sold out fact: The phones not able to make a mark on many specially the one to which matters a lot about the company well-wished – the European carriers. Four major telecom operators in Europe, where the phones have been on sale since before Christmas, told Reuters the new Nokia Lumia smartphones were not good enough to compete with Apple’s iPhone or Samsung’s Galaxy phones. “No one comes into the store and asks for a Windows phone,” said an executive in charge of mobile devices at a European operator, which has sold the Lumia 800 and 710 since December.

Even Moody’s Investor Service had downgraded the senior debt ratings of the mobile giant to Baa3 from Baa2 and its short-term debt ratings to Prime-3 from Prime-2. All ratings continue to have a negative outlook. As soon as the rating announced, Timo Ihamuotila, Nokia’ Executive Vice President and CFO responds back by saying, “Nokia is quickly taking action. Nokia will continue to increase its focus on lowering the company’s cost structure, improving cash flow and maintaining a strong financial position.” Nokia will report its first quarter 2012 results on April 19, 2012.

The company in its last annual SEC financial report revealed that smartphone shipments reached 77.3 million units, which are down by 25% as compared to 2010, whilst feature-phone shipments totalled 339.8 million units, a decline of 3% year-over-year. As a result of its falling mobile sales, the average selling price (ASP) of Nokia’s mobile devices fell to $75, down 11% from $85 in 2010.

Well, what the plan holds for the company today it will unveil in few hours as all eyes now on what the mobile giant present today. Stay tuned with us and we keep you updated with time to time move.

Update: Nokia reports operating loss of €1.3 billion for Q1 2012.

(Image Source: Nokia logo, Featured Image)

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Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.