Nokia’s reported loss was not as bad as expected, and the Finnish handset maker forecasts a profits next quarter for the handset business as the company gets ready to unveil devices based on Microsoft’s Windows Phone operating system. Nokia shares surged over 10 percent in before U.S. markets opened.
Nokia and Microsoft are progressing toward the unveiling of devices intended to change the direction of the mobile market performance of both companies. Over a year in the making, the plans will soon be vetted by end users.
Chief Executive Officer Stephen Elop, a former Microsoft executive, will likely announce a line of devices based on Microsoft’s Windows Phone software during next week’s Nokia World event in London.
Nokia is also expected to keep producing and upgrading Symbian smartphones through 2016. Elop set a target in February of distributing 150 million additional Symbian devices.
Nokia has been losing pace to Apple and Google in the smartphone market. And with a market share of just 2-3 percent, Windows Phone has had limited success in the smartphone market so far. Nokia had been the world’s largest cellular phone producer since 1998 with market shares eventually touching 40 percent, but researcher Gartner Inc now puts Nokia’s market share at 22.8 percent for Q2. Apple moved over 17 million iPhones in the third quarter and set a record of moving more than 4 million iPhone 4S devices over the first weekend. Google Android market share is now hovering around 50 percent, and around 15 percent share for Apple.
Nokia is expected to produce a total of twelve Windows Phone 7 smartphone models in 2012. All of them should deliver significant benefits over the Symbian platform that is being phased out.
Nokia announced a net loss in Q3 of $93.6 million as sales fell 13 percent, which was not as bad as expected, on sales of $12.3 billion, down 13 percent from the prior year. The company sold over 106 million mobile devices, which was also surpassing estimates. Smartphone sales were down 38 percent from year-over-year, lagging at 16.8 million. Although feature phone sales were greater than expected, Nokia took a hit on margins. Operating margins were only 2.4 percent in Q3, down from 11.3 percent a year ago, and average selling prices dropped 20 percent from the prior year.