Could Microsoft be buying a pup?
Phone sales at Nokia were 5 per cent down in Q4 compared to the previous quarter of 2013, placing a question mark over the wisdom of Microsoft’s impending purchase of the Finnish manufacturer’s handset division. Fourth quarter sales came in at £2.1 billion, sending Nokia’s shares plunging more than 10 per cent in Helsinki yesterday [23rd January 2014]. Perhaps even more worrying for Microsoft, which is expected to finalise its purchase in the next month or two, was that the decline in sales was largely down to a drop in demand for Nokia’s flagship Lumia smartphones.
The Lumia range is, of course, the first fruits of its relationship with the Seattle software giant and which are powered by its Windows Phone 8 OS (WP8).
Sales of Lumia handsets came in at 8.2 million compared to 8.8 million in Q3, though Nokia chairman and interim CEO Risto Siilasmaa put a brave face on the dip.
He’s quoted as saying he believed the company’s revenues would soon improve as the benefits of its tie-up with Microsoft became more apparent.
Nokia sold some 30 million Lumia smartphones in 2013, up from just 14 million in 2012, though these sales continue to be dwarfed by those of Apple and makers of Android phones.
*Footnote: South Korean electronics giant Samsung has warned that weak earnings momentum will continue into 2014, as it confirmed that operating profits fell for the first time in two years in the final three months of 2013. Profit growth at Samsung’s mobile division, its main revenue driver, stalled as the top end of the smartphone market which it admits is becoming “increasingly saturated”. Sales of mobile devices declined by 9 per cent over Q3, contributing to a drop in overall operating profit of 18 per cent to $1.2 billion.