Nokia posts huge $954m operating loss but over one million Lumia devices sold

Firm upbeat that shift to Windows Phone platform is paying off

Nokia has sold over one million Lumia devices since their launch late last year, but the firm still saw huge losses as it struggles to keep pace with Apple and Android.

The Finnish manufacturer made an operating loss of €954m compared to the same time last year, while net sales were down by 21 per cent year-on-year to €10bn.

Similarly, the firm shipped a total of 25.3 million devices in Europe during the fourth quarter, 8.2 million fewer than the same period in 2010. However, this was an increase of 4.6 million devices on the third quarter.

While year-on-year results looked bleak, chief executive Stephen Elop claimed the firm was moving in the right direction as sales were up in almost every area when looking at quarter-on-quarter figures.

"To date we have sold well over one million Lumia devices. From this beachhead you will see us push forward with the sales, marketing and successive product introductions," he noted in the Nokia Earnings report.

"We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012."

Nevertheless, the quarter-by-quarter claims need to be treated with care, as the time frame includes the Christmas period, where sales are usually higher.

Elop also noted that Nokia plans a re-newed push into the US market and that AT&T will position the firms forthcoming Nokia Lumia 900 "as a lead LTE device".

Nokia also revealed it received its first payment from Microsoft as a result of the partnership, with the firm receiving €180m in the form of a "platform support payment", which includes minimum software royalty commitments.

Nokia posts huge $954m operating loss but over one million Lumia devices sold

Firm upbeat that shift to Windows Phone platform is paying off

Francisco Jeronimo, research manager for European mobile devices at IDC said the results were a good start for the Nokia Windows Phones partnership.

"The massive marketing investment to promote the Nokia Lumia 800 contributed to the firm shipping better than expected volumes," he said.

"IDC research also found HTC and Samsung Windows Phones were significantly affected since the Nokia Lumia series were out, which signals a clear dominance of Nokia in the Windows Phones space over the next quarters."

Jeronimo added, though, that the firm could not rely on Windows devices to save the company in 2012 and more cuts would need to be made.

"The Windows Phones volumes will not be enough to offset the decline of Symbian and the company needs to improve the internal structure by cutting costs to remain profitable," he added.

Carolina Milanesi research vice president at Gartner agreed that the results were a positive step for Nokia.

"We were expecting sales to be a bit higher than what Nokia reported, but that was before seeing how strong Apple was," Milanesi said.

"I think that passing the one million sales mark was important and means that the Nokia/Microsoft partnership was not a failure."

The result will no doubt be looked at with interest at Microsoft, which has backed the success of its Windows phone platform on the belief Nokia can turn its fortunes around.