Nokia Handset And Network Equipment Sales Slump In Q4
Nokia and Microsoft both have much to do once devices and services sale is complete
Sales of Nokia mobile devices fell by 29 percent year-on-year during the fourth quarter of 2013 while sales of networking equipment slumped by 22 percent, ahead of the sale of the Finnish manufacturer’s devices and services business to Microsoft.
The results will concern both Microsoft and the post-handset Nokia, which will derive most of its revenue from Nokia Solutions Networks (NSN) once the takeover is complete, along with its HERE maps and advanced technology businesses.
Nokia Solutions Networks
Total non-handset sales amounted to €3.476 million, a year-on-year decrease of 21 percent, contributing to an operating profit of €274 million, down by 17 percent year-on year.
Sales at Nokia Solutions Networks were down in all regions except greater China, contributing to a 22 percent year-on-year decline to €3.1 billion. Sales in the HERE maps and advanced technology divisions were also down, but these only currently form a minor par
t of Nokia’s finances.
Despite the drop in sales in its three remaining business units, Nokia chairman and interim CEO Reto Siilasmaa believes that NSN can ensure the new Nokia can thrive, while he also senses opportunities for HERE maps in the automotive industry.
Nokia future
“The fourth quarter of 2013 was a watershed moment in Nokia’s history,” he says. “I am pleased with the progress we have made thus far in our strategy evaluation and excited by the opportunities ahead for each of our three continuing businesses: NSN, HERE and Advanced Technologies.
“The strength of NSN’s underlying profitability highlights just how fundamentally different the company is today, compared with two years ago when it started its restructuring and transformation program. Today, we are more focused, more innovative and more disciplined. With these fundamental elements in place, we believe NSN is well-positioned to deliver solid business performance for the year ahead.”
Microsoft worries
Sales of Nokia mobile phones slumped by 29 percent during the fourth quarter of 2013, although this will soon be Microsoft’s problem. Nokia blames the drop on falling mobile phone sales and to a lesser extent, a disappointing reception for its Lumia smartphones.
It says increased competition at lower price point affected sales of its feature phones, while its smartphone business continues to struggle with the strong momentum of competing platforms such as iOS and Android.
Microsoft is likely to be concerned about the figures, despite the recent relative success of Windows Phone. Nokia is the most important manufacturer of Windows Phone hardware and has contributed to the operating system’s increased share in Europe, where its market share is higher than ten percent in some countries.
