The latest company figures released by Nokia show that they lost a whopping £787 million loss in the third quarter of 2012 . Total sales were higher than expected (£5.86 billion) , but still fell 20 per cent compared to the same time last year.
Additionally, the Lumia range sales fell from 4 million the second quarter of 2012 to 2.9 million in the third quarter. To be fair some reduction in Lumia sales was expected due to the imminent launch of Nokia's Windows Phone 8 Lumia smartphones. However, the sales are still far below what Nokia had expected when they switched to the Windows platform back in February.
One of the major reasons for Nokia's huge losses in the third quarter is that sales in China fell from £0.97 billion to just £244m. Apparently, this is due to Chinese operators pushing subsidized handsets lower priced than Nokia's smartphones.
The market initially responded positively to Nokia's latest statement with sales rising 8 per cent. However, by the end of the day they closed up just 1 per cent. The Guardian posted some very scary facts including that Nokia have spent 30 per cent of their cash reserves in just 12 months and have lost 90 per cent of their market share since the iPhone launched in 2008.
Nokia can not continue to sustain its recent losses and they need to reverse their fortunes and quickly. The problem in China needs to be resolved and the company need to hope that the Nokia Lumia 920, 820 and all future Windows Phone 8 smartphones fair significantly better than the current Lumia range.
The problem for Nokia is compounded by the growing power and influence of Apple and Samsung who are completely dominating the worldwide smartphone market. The next year is crucial because if Nokia fail to turn around their fortunes we really fear for their long term future.
By Simon Thomas on 19th October, 2012