Nokia Reports Q1'12 Handset Shipments of 82,7 million
Nokia Reports Q1'12 net sales of 7.4 billion (-29% YoY, compared to 10 399 million in Q1'11; -26% QoQ change) while the operating profit dropped into a loss of 1.34 billion (US$1.76 billion) from a profit of 439 million a year ago. Losses incurred due to greater than expected competitive challenges and seasonality; reported losses also primarily driven by charges related to restructuring activities, said the company.
Smart Devices net sales (1704 million) were down by 52% YoY and Mobile Phones net sales (2311 million) by 32% YoY.
The year-on-year decline in our Smart Devices net sales in the first quarter 2012 was primarily due to significantly lower Symbian volumes. On a sequential basis, the decline in our Smart Devices net sales in the first quarter 2012 was also due to lower Symbian volumes, partially offset by growing sales of Nokia Lumia devices.
The year-on-year decline in Smart Devices ASP in the first quarter 2012 was driven primarily by price erosion due to the competitive environment and a higher proportion of sales of lower priced Symbian devices. This was partially offset by sales of Nokia Lumia devices at an ASP of approximately EUR 220, as well as a positive impact related to deferred revenue on services sold in combination with our devices.
The year-on-year decline in Mobile Phones ASP in the first quarter 2012 was primarily driven by an increased proportion of sales of lower priced devices and the negative impact from foreign currency hedging, partially offset by sales of recently introduced higher priced devices, including the Asha family.
On a year-on-year basis Devices & Services net sales in the first quarter 2012 declined in all regions, particularly in China, primarily due to competitive industry dynamics adversely affecting both our Mobile Phones and Smart Devices net sales. On a sequential basis, Devices & Services net sales in the first quarter 2012 declined in all regions, except for North America, where sales were driven by the introduction of the Nokia Lumia 710 with T-Mobile.
In volume, Smart Devices volume decreased by 51% to 11.9 million, and Mobile Phones by 16% YoY to 70.8 million.
The year-on-year decline in Smart Devices volumes in the first quarter 2012 continued to be driven by the strong momentum of competing smartphone platforms relative to our Symbian devices. All regions showed a significant year-on-year decline in the first quarter 2012 except for Latin and North America, which showed slight year-on-year growth.
On a year-on-year basis, the decline in our Mobile Phones volumes in the first quarter 2012 was primarily driven by our reduced portfolio of higher priced feature phones compared to the first quarter 2011, partially offset by sales of recently introduced products which represented a higher proportion of our portfolio. In addition, the year-on-year decline was due to distributors and operators purchasing fewer of our feature phones during the first quarter 2012 as they reduced their inventories of our feature phones compared to increasing their inventories in the first quarter 2011. The year-on-year decline in our Mobile Phones volumes in the first quarter 2012 was most pronounced in China and Europe primarily due to competition from more affordable smartphones and increased competition from competitors with broader portfolios of feature phones with more smartphone-like experiences, such as full touch devices.
Commenting on the Q1 results, 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.
We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging.
At the same time, the lower price tiers of our industry are undergoing a structural change, and traditional feature phones are challenged by full touch devices. As a result we are taking deliberate measures to continue to renew our Series 40 platform, and we plan to strengthen our line-up in Q2 2012. We are making investments in our Mobile Phones business unit aimed at addressing the gaps in our offering.
We have a clear sense of urgency to move our strategy forward even faster. We are pursuing step function changes by having launched the Lumia 610 and Lumia 900 in the first quarter, expanding market coverage, increasing advertising, introducing key customer-requested features and broadening our most successful go-to-market activities. At the same time, we have focused our efforts in the low-end of smartphones and feature phone asset to drive improved business results and conserve cash.
We are confident in our strategy and focused on responding urgently in the short term and creating value for our shareholders in the long term.