Nokia sells 1m Lumia smartphones, war of ecosystems begins

26 Jan 2012

The Nokia Lumia smartphone, which Nokia is launching in most international markets, including Ireland, next week

In what has been another challenging quarter for Nokia financially, CEO Stephon Elop says that structurally and technologically, Nokia is back on the road. And he has some 1m sales of its new Lumia phones to prove it.

For the fourth quarter, Nokia made an operating loss of €954m as sales fell 21pc year-on-year to €10bn.

Nokia is still the largest phone maker in the world by volume, but in the smartphone segment it is facing stiff competition from Apple’s iOS and Google’s Android ecosystems and has jettisoned its reliance on Symbian in favour of Microsoft’s new Windows Phone OS as a route to recovery.

Elop today revealed that the Microsoft Windows Phone alliance is paying off with some 1m of its new Lumia smartphones sold to date. The Lumia was well received at the recent Consumer Electronics Show, indicating Elop has restructured and repurposed the company.

He said Nokia has the warchest to drive a wedge into the smartphone market, indicating a strong balance sheet with net cash and liquid assets of €5.6bn.

Nokia secures beachhead – let the ecosystem invasion begin

“The fourth quarter of 2011 marked a significant step in Nokia’s transformation. Most notably, in Q4 we introduced new mobile phones and smartphones, which resulted from the strategy shift in our Devices & Services business,” Elop said.

He said that the company has seen double-digit percentage growth in its dual SIM business, particularly in India, the Middle East and South East Asia, with the success of the Asha range of mobile phones in 76 markets worldwide.

“We are building on this foundation with R&D investments as we continue our journey to connect the next billion to the internet.

“Also in October, just six months after signing an agreement with Microsoft, we introduced our first two devices based on the Windows Phones platform – the Nokia Lumia 800 and the Nokia Lumia 710. We brought the new devices to market ahead of schedule, demonstrating that we are changing the clock speed of Nokia. To date, we have introduced Lumia to consumers in Europe, Hong Kong, India, Russia, Singapore, South Korea and Taiwan.

“We have also started our important re-entry into the North American market. Earlier this month, T-Mobile started selling the Nokia Lumia 710 as a lead device. We also announced the new Nokia Lumia 900 with AT&T, and immediately received a number of industry awards. The Nokia Lumia 900 is our third Lumia device, our first LTE device designed specifically for the North American market, and AT&T is positioning the Lumia 900 as a lead LTE device.”

Elop said he accepts that in the war of the smartphone ecosystems, strong contenders in the form of iOS and Android are already on the field.

“And with Lumia, we have demonstrated that we belong on the field. Our specific intent has been to establish a beachhead in this war of ecosystems, and country by country that is what we are now accomplishing.

“To date we have sold well over 1m Lumia devices. From this beachhead of more than 1m Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful. 

“We also plan to bring the Lumia series to additional markets, including China and Latin America in the first half of 2012,” Elop said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years