May 31, 2011 18:11 GMT  ·  By

Leading mobile phone maker Nokia expects its financial performance for the second quarter of the ongoing year to be impacted by the recently announced adoption of Microsoft's Windows Phone platform for its smartphones, and has just provided a lower guidance for the time frame.

Of course, the move from Symbian to Windows Phone is not the only factor that would negatively impact Nokia's revenue, and the company is aware of that.

“During the second quarter 2011, multiple factors are negatively impacting Nokia’s Devices & Services business to a greater extent than previously expected,” the company announced.

Among these factors, Nokia lists:

- the competitive dynamics and market trends across multiple price categories, particularly in China and Europe; - a product mix shift towards devices with lower average selling prices and lower gross margins; and - pricing tactics by Nokia and certain competitors.

The handset vendor announced that its Devices & Services net sales would be only in the range of EUR 6.1 billion to EUR 6.6 billion for the three months period.

The average selling prices of its devices are lower than before, and the volume of handsets has decreased too.

Devices & Services non-IFRS operating margin should be well below the previously expected range of 6% to 9% for the second quarter 2011, the company announced.

At the same time, the mobile phone maker announced that it does not feel that it would be appropriate to provide annual targets for 2011, but that it would deliver short-term quarterly forecasts, along with an annual outlook when circumstances allow.

Nokia also unveiled some of the actions it takes towards addressing the issues that are currently impacting its Devices & Services business.

Among these, we can count the shipping of a new dual-SIM device, reduction of operation expenses, or the bringing of new innovative capabilities to its Symbian line up.

The first Nokia Windows Phone should land in Q4, the company notes, adding that it is pleased with the manner in which the development of Windows Phone progresses.

As soon as the transition would be completed, Nokia hopes that its Devices & Services net sales would grow faster than the market, and that the Devices & Services non-IFRS operating margin would be 10% or more.

“Strategy transitions are difficult. We recognize the need to deliver great mobile products, and therefore we must accelerate the pace of our transition,” said Stephen Elop, president and CEO of Nokia.

“Our teams are aligned, and we have increased confidence that we will ship our first Nokia product with Windows Phone in the fourth quarter 2011.”