Latest results from troubled handset-maker Nokia show that things aren’t getting worse as fast as some had feared
There are few companies where reporting a billion-dollar operating loss is a mark of relative success. But today’s results from Nokia gave the markets a pleasant surprise: sales are only down 24 per cent, revenue is only down by 29 per cent and the company has more cash left than many thought – shares rose by as much as 15 per cent.
The company’s new Lumia handsets, running Microsoft’s Windows Phone operating system, have been well received, but they’ve sold just 600,000 in America and 4 million worldwide. This is what analysts had expected, roughly. But it’s nonetheless unfortunate that Microsoft recently chose to upgrade Windows Phone in such a way that the current flagship Lumias won’t be compatible with the new version of Windows Phone, just a few months after they were Nokia’s top products.
Retailers desperately want Nokia and Windows Phone to provide a viable counterpoint to Apple and Google's Android operating system - the hardware is beautiful and it deserves to do well. But without its rivals' momentum the project remains an uphill struggle. Even with Microsoft's backing, Windows Phone may yet end up being the mobile version of Windows on the PC, and that could leave users simply asking for apps that are compatible with both Windows and their existing phones. That's why, for instance, Microsoft already makes apps for the iPad.
These results may prove to be the inflection point for Nokia’s losses – if chief executive Stephen Elop has reshaped the company so that it has fewer, more efficient staff who will make better products, and also signeddeals such as those he trumpeted with car makers, then there could be some hope for the struggling company. Certainly, as things stand, Nokia looks like a much better bet than BlackBerry.
But the fact that Nokia beat market expectations today reflects primarily how low those expectations were, ratther than that the firm is back on the march.
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