Nokia Bleeds Even More Sales Than Expected, Sales VP is Booted

From DailyTech: The situation at the world's largest phonemaker Nokia Oyj. (HEX:NOK1V) has deteriorated substantially in the last year and a half. Unable to compete against Google Inc.'s (GOOG) Android and Apple, Inc.'s (AAPL) iOS in the lucrative smartphone market, Nokia made a bold gamble and partnered with Microsoft to deliver Nokia Windows Phones.

The deal was presumably first conceived with the installment of ex-Microsoft Corp. (MSFT) VP Stephen Elop in September 2010, just a month before Microsoft's formal launch of Windows Phone 7. The pact was formally announced on Feb. 11, 2011. As part of the pact, Microsoft pledged to pay Nokia billions divided into a series of quarterly payments, the first of which began to trigger last year.

Nokia on Thursday reported [PDF] its financial results for Q1 2012, a key barometer of the deal and the company's overall health. The results were slightly worse than expected.

Financial Times information indicates that of the 27 analysts surveyed Nokia was estimated to make $7.45B USD. Actual sales came in at $7.34B USD -- appr. 1.5% lower than expected.

Nokia's problems are numerous. Smartphone sales fell in half on a year-to-year basis (51 percent). But Nokia's feature phone sales also fell by 16 percent (with a 32 percent revenue erosion), thanks to fierce competition by Samsung Electronic Comp., Ltd. (KS:005930) which is pushing hard to become the world's top seller of mobile phones (both feature and smartphones) in 2012.

There are, however, some promising signs from Nokia. The company has commited a lot of effort overhauling its feature phones with the new Asha lineup based on the lightweight S40 operating system. Likewise Nokia's Lumia 900 is by some indications close to becoming Microsoft and Nokia's first major sales hit in the U.S. -- despite difficulties in Europe.

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