Nokia's Windows Phone licence costs set to soar as quarterly sales disappoint

By Graeme Burton
24 Jan 2013 View Comments
Nokia Lumia 620 with Windows Phone 8

Facts and figures

Further reading

Nokia's fourth quarter results continued the company's long-running decline since Stephen Elop took over as CEO. Sales were down by 19.6 per cent on the same quarter in 2011, falling from €10bn (£8.5bn) to €8.04bn (£6.8bn). However, due to lower costs, the company claimed an operating profit of €439m (£370m) in the quarter, compared to an operating loss of €954m (£810m) a year earlier.

However, smartphone sales remain well down due to the collapse in sales of Symbian-based phones after the company decided two years ago to discontinue the operating system. The company sold just €1.23bn (£1.04bn) of smartphones, down 55 per cent, selling just 6.6 million smartphones in the quarter - that compares to almost 50 million iPhones sold in the same period.

Three-quarters of Nokia's smartphone sales were either obsolete Symbian phones, or obsolete Windows Phone 7 smartphones, which Nokia was forced to discount to clear following the launch of Windows Phone 8. Only around two million flagship Windows Phone 8-based Lumias were sold in the quarter.

Over the year, Nokia's net sales fell by 22 per cent, from €38.7bn (£32.8bn) to €30.2bn (£25.6bn). The company posted an operating loss for the year of €2.3bn (£1.46bn) compared to a loss of €1.1bn (£932m) in 2011. However, research and development costs were cut by 14.3 per cent from €5.6bn (£4.75bn) to €4.8bn (£4.07bn). Cash outflows amounted to €1.5bn (£950m), including dividend payments of €750m (£635.6m).

However, recovery at Nokia Siemens Networks was one bright spot in an otherwise gloomy set of results for Nokia, contributing €1.3bn (£1.1bn) to Nokia's net cash position.

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