Outlook bleak for embattled Nokia

Nokia posted a £1bn loss and another set of disappointing sales.

Although the company increased sales of its flagship Lumia range that run on Microsoft’s Windows Phone operating system, the four million handsets sold compare poorly to rivals Apple and Samsung, with Google recently saying it was activating a million Android handsets a day.

“Really, it remains as it was – there was some growth in Lumia phones, but Windows phones are not growing fast enough to make up for falling sales in Symbian handset,” said Geoff Blaber, director of devices and software platforms at analyst firm CSS insight. “To an extent, the feature phone sales made up for smartphone losses, but it is a real challenge.”

The downside is that Q3 will be extremely challenging with people waiting for Windows 8 handsets – so it is likely to get worse before it gets better

With a new version of Windows due out in October, there is also a real concern that consumers will hold off buying into the Microsoft ecosystem until then, if at all – meaning Lumia revenues could tank in the third quarter.

“Can Noikia grow Lumia? The downside is that Q3 will be extremely challenging with people waiting for Windows 8 handsets – so it is likely to get worse before it gets better,” said Blaber.

The situation is all the starker because Nokia’s current crop of handsets won’t work with key Windows Phone 8 features, and the company has already slashed the prices of its Lumia 900 phones.

It wasn’t all gloom for Nokia, however, as its share price actually went up 15% as investors were pleased that the company hasn’t eaten into its cash piles despite the losses.