Nokia has issued a profit warning, saying first quarter results will be worse than expected.
The ailing smartphone maker said it had sold two million Lumia handsets in the first quarter, at an average selling price of €220. By comparison, Apple claimed to have sold one million iPhone 4S handsets in the 24 hours after it went on sale.
“During the first quarter 2012, multiple factors negatively affected Nokia’s Devices and Services business to a greater extent than previously expected,” the company said.
Nokia attributed the decline to competition hitting smartphone sales, especially in India, the Middle East, Africa and China, as well as declining margins for the smart devices business unit.
Review
The company said it would post operating margin losses of 3% for the first quarter, with the second quarter expected to be at that level or below. Nokia said the prediction for next quarter reflects “timing, ramp-up, and consumer demand related to new products” and “the macroeconomic environment”.
Disappointing quarter
CEO Stephen Elop said the “disappointing” first quarter results and second quarter outlook showed the company “continues to be in the midst of transition”.
“Within our smart devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success,” he added, saying Windows Phone was winning “solid support” as a third platform after Android and iOS.
Nokia added it would take “tactical pricing actions”; earlier today, it revealed a rebate on the Lumia 900 in the US as a “goodwill” gesture after the discovery of a software flaw.
The company plans to bring more new products to market in the second quarter. “We are increasing the clock speed of the company,” Elop said.
Nokia is due to release its full first quarter results on 19 April.
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