Nokia loses €3bn as Windows Phone partnership struggles

Nokia has reported a €3bn loss, due to what it describes as greater than expected competitive challenges and seasonality

Nokia has reported a €3bn loss due to what it describes as greater than expected competitive challenges and seasonality.

Its Q1 2012 sales after tax was €7.4bn compared to €10.4bn for the same quarter in 2011. The troubled phone maker said the losses were primarily due by charges related to restructuring activities.

Stephen Elop, Nokia CEO, said: "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.”

Commenting on the result, Tony Cripps, principal analyst at Ovum, said, ”Nokia is in a difficult position. It has not handled the transition from the Symbian OS to Windows Phone well.”

Cripps said the combination of Windows Phone and Nokia‘s Lumia smartphone is very compelling, but the joint venture with Microsoft has been unable to shift people’s perception.  He said, “Apple figured out that the people to target are consumers. The only real problem is that Microsoft and Nokia are not getting the message out.”

Cripps believes it is up to mobile operators to back the partnership, otherwise Nokia will fail. “Carriers want a competitive ecosystems with three or four strong phone platforms so it becomes imperative for them to back particular technologies.”

He said the success of Apple’s iOS and Google Android has meant mobile telcos have been effectively cut out from their subscribers because smartphone user spend money on iTunes or Google Play (The Android Marketplace). At the same time the operators are investing heavily in new infrastructure such as 4G, to support fast data rates.

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