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Lumia Is Up for Nokia, But Red Ink Still Flows
Lumia Is Up for Nokia, But Red Ink Still Flows

By Barry Levine
April 18, 2013 11:18AM

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More basic phones than smartphones are still sold by Nokia, and the company wants to keep that end of the market so that owners of those less-expensive models upgrade to Nokia Windows smartphones -- not, say, to Android models or the iPhone. To help protect its lower end, Nokia has started selling a 15 euro ($19) phone in emerging markets.
 



Nokia is showing some less-bad news, amid rumors that it's coming out with a tablet/phone hybrid. Is the phone giant showing signs of exiting its slump?

The Finnish company has posted a first-quarter net loss of 272 million euros ($356 million), a disheartening sum except when compared against the loss of 928 million euros ($1.21 billion) a year ago at this time. The reduction in the loss was largely due to cost cutting, since its net revenue plunged from 7.8 billion euros ($10.2 billion) in the first quarter a year ago to 5.8 billion euros ($7.58 billion).

Across the planet, Nokia's mobile phone sales dropped, including a 60 percent plunge in China. Globally, the sales drop for its smartphones was 30 percent, and, for mobile phones overall, 21 percent down.

Lumia Grew 27 Percent

One of the bright spots -- and potentially a light on the horizon -- is that the company's much-touted Lumia phone line grew 27 percent in the first quarter. Nokia reported it sold 5.6 million units of Lumia handsets in the first quarter, an increase from 4.4 million in the previous quarter.

Nokia, despite its troubles, is still in second place worldwide as a handset maker, so it has not yet fallen too far to recover. The company has been hammered since it switched from its aging Symbian operating system to Microsoft's Windows Phone in early 2011.

The phone maker still sells more basic phones than smartphones, and wants to keep that end of the market so that owners of those less-expensive models upgrade to Nokia smartphones -- not, say, to Android models or the iPhone. To help protect its lower end, the company has started selling a 15 euro ($19) phone in emerging markets, and is expected to revise its mid-range Asha feature phone line sometime this year.

Another route for Nokia is to get into the tablet/phone hybrid market, which has been dubbed with the odd-sounding name of "phablet." According to circulating rumors, the company plans a phablet that resembles the popular Galaxy Note from Samsung, but has higher specs and, possibly, will become part of the Lumia brand.

'Still in Flux'

Since users primarily want to know what a device can do, Microsoft and Nokia have to keep developers interested even as it tries to get beyond the platform's single-digit market share.

Al Hilwa, program director for Application Development Software research at IDC, told us "developers are already overwhelmed with the set of platform choices," but added that Nokia and Microsoft, like BlackBerry, have been careful about seeding developers with support.

Hilwa pointed out, however, that developers for Windows Phone have to confront the problem that Windows 8 is the tablet platform, and that means two app versions for a mobile app that is released for both a smartphone and a tablet, instead of, as for Android or iOS, one app version for two different form factors.

He noted that the coming Windows Blue update to version 8 "appears that it will be bringing them closer together," but, until it does, "the whole platform is still in flux."
 

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