14 DAY TRIAL // Today, Finnish company Nokia has announced its financial results for the first quarter of the year, and it has unveiled phone sales lower both year-on-year and sequentially.
According to the company, sales of Nokia phones went down 30 percent in Q1 2014 when compared to the first quarter of the last year, to only €1.92 billion ($2.66 billion).
Due to lower sales, the company has also announced an operating loss of €326 million ($452 million) for the timeframe, on gross profit of only €313 million ($434 million).
“On both a year-on-year and sequential basis, our Mobile Phones net sales were affected by competitive industry dynamics, including intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio,” the company has announced (PDF link).
“Our Smart Devices net sales were affected by competitive industry dynamics including the strong momentum of competing smartphone platforms.”
However, sales of Lumia smartphones were higher year-on-year, despite being lower when compared to the fourth quarter of the last year. Q1 sales are usually lower sequentially, and it does not come as a surprise that this happened again.
Unfortunately, Nokia has not provided specific info on sales of Lumia devices, but we can assume that they were between 5.6 million and 8.2 million, the numbers reported for Q1 and Q4 2013, respectively.
The Average Selling Price (ASP) of Nokia handsets also dropped in Q1 2014, on both a year-on-year and sequential basis. Both smartphones and mobile phones were affected, the company has announced.
As PhoneArena notes, it might be so due to an increase in sales of cheap Lumia devices, as well as due to the launch of new, more affordable mobile phones and other handsets, such as Asha and Nokia X. In fact, the company launched no less than five affordable phones in the first quarter of the year.
“The year-on-year and sequential declines in discontinued operations net sales in the first quarter 2014 were primarily due to lower Mobile Phones net sales and, to a lesser extent, lower Smart Devices net sales,” Nokia has said.
For those out of the loop, we should note that Nokia sold its Devices & Services division to Microsoft, and that the transaction was completed on April 25. This is the main reason for which Nokia refers to this division as “discontinued operations.”
Moving forth, Nokia will focus on three core businesses, namely Networks, HERE (the popular location services), and technologies. Those who would like to have a closer look at Nokia’s earnings report for the first quarter of the year should head to this page on the company’s website.