Nokia’s Q1 Positives and Concerns!! Way ahead and why Q2 can be much better quarter for Nokia overall.

imagesCAWQM6C1So, Nokia’s Q1 results are out and time to analyse and find out what has been hits and misses. Coming to hits first,

  • Lumia shipments grown to 5.6 million and that too beating the effect of seasonality (Q1 results are usually dismal)
  • Nokia’s cash position is strong at EUR 4.5 Billion at the end of Q1.
  • Lumia’s ASP have been really high and that indicates good uptake for higher end devices in the mix.
  • Nokia achieving underlying profitability

Coming to misses now,

  • Asha devices and feature phones sales plummeting more than what was expected due to seasonality.
  • Here Maps division still not performing as expected.
  • Nokia’s US strategy is killing Lumia sales. In North America Nokia has sold only 0.4 million devices in Q1Exclusivity deal with AT&T may have been good, when supply was limited. But, the 6-month exclusive agreement with AT&T has killed Lumia sales in Q1 and will impact Q2 as well.
  • Here Maps monetization is really puzzling everyone. Nokia claims it to be powering most of the vehicles around, but the returns are not that great.

Coming to what Nokia should be doing going ahead and what to expect from Q2,

  • First of all they should get rid of this “exclusive deal” absurdity. It has become a burden for Lumia sales. It has marred Q1 sales in US and even if Nokia launches Lumia 928 exclusive to Verizon only and don’t bring it globally it is still too much R&D effort for just one market and one carrier. Ridiculous!!
  • New Asha devices with better design and features are coming soon, but Nokia is moving really slow there as this should have happened during Q1 itself.
  • Perhaps Nokia needs to monetize Here Maps in a much better way for earning advertisements revenue.

This is why Q2 can be much better,

  • Lumia 520 has started rolling out since the beginning of Q2 and if Lumia 620’s performance in Q1 and recent sales reports are any indication, it may prove to be biggest hit Lumia device for Nokia.
  • Lumia 720 which started rolling out in mid of April will reach to many markets. Lumia 620 is also getting launched in many more markets.
  • Lumia 920 price has been slashed in China and may be followed in more markets. Lumia 928 launch may add much-needed support at Verizon in US.
  • Seasonality mars Q1 performance and historically Nokia always has better Q2 than Q1.
  • New Asha device will be launched along with wider roll out of next-gen chaepest featurephones like Nokia 105.

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About Kamal

Blogging is my major hobby. Huge Nokia fan and have been using mostly Nokia phones since my first one. Hope you have a great reading time on this blog!! Be in touch @nokiapoweruser on Twitter.

16 comments

  1. Android Jelly Bean is coming to every devices, even the low end devices & their sales are accelerating. Do you think, nokia will be able to sale its useless Lumia devices which just looks good from outside but there is nothing inside except a good camera.

    Karbonn S5 titanium comes with Quad core Snapdragon 1.2GHz processor with Adreno 230GPU; price is just around 12K & even 5K-6K devices are also coming with atleast cortex A7/A8 processor @ 1.2GHz & is running JellyBean; not just the Indian manufacturers but Samsung also had launched new version of galaxy Y at around 6K.

    Nokia had made the worst decision of leaving the symbian & switching to windows phone; going back to Q4, 2010; Nokia had sold 4 million units of N8 alone during that period; other devices like C6-01 & similar made a debut of around 1.5-2 million (I can’t remember); again they are not developing S40 Asha. People don’t like Windows on mobile as its useless compared to Android. Just waiting for the days, when Nokia will be declared as bankrupt.

    • Troll harder!! Samsung will certainly pay you much more than other paid trolls. Anyways, You guys are not writing anything against HTC nowadays?

  2. Nokia investor

    Kamal, think you’re right about exclusivity hurting Nokia badly in the US, despite what Whatever thinks. Doesn’t sound like Whatever lives in US or understands its markets. I live in a major West Coast city. Verizon dominates in the western US and is easily the most important carrier in the entire US. So far, haven’t been able to purchase a high-end Nokia phone at Verizon (just the 822). I had to settle for buying an HTC 8X. If the 928 is as good as rumored that should help. However, with Samsung G4 and the next iteration of iPhone coming soon, it may be too late this cycle. Even more troubling, Nokia does little, if any, advertising here. Their brand awareness is absolutely zero here. Given that Microsoft, Intel, Apple, Google, (hell, even Linux foundation), etc. are all HQ’ed here, this is arguably the most important market in the world. Nokia MUST start doing more and getting out ahead of the curve, not lagging from behind…

    • I agree. I’m looking forward to the release of the 928 and really hoping they’ll raise the marketing in a big way. MSFT too needs to do way more there and they’ve got the means to do it.

  3. The bottom line is that Nokia’s marketing is close to nonexistant. Does anyone remember the lumia 920 adds? If you happened to have seen one, you may remember how ridiculous it was. A lot of good things have happened since Elop took over, but now is the time to fix the marketing!

  4. the way lumia is proceeding is good. I expected better but it requires patience, lot of patience. They had this terrible Q3 2012 in which the wp8 announcement killed the growth we were seeing. they literally restarted from scratch, discounted the phones they produced and now they are growing again. Honestly the growth rate is not terrific, but they cannot risk to flood the market with products that stay unsold like happened with 800. They have another plan. 920 was in October, now will be 928, soon catwalk and eos. Can u imagine if they would have produced too many 920? End of innovation, they should have passively waited to sell all that phones. You can say that there could have been demand. We have no proof. The risk was not affordable.
    The only possibility to speed up sales would be micrisoft not asking any fee and marketing more, loosing money. This is not the case and if nokia keeps growing in average 30% per trimester it would reach 12-13 million in Q4 (of course I expected more from 2013 but now I have lowered the expectations even if not breaking the 10mn wall by q4 2013 would be a bad signal)

  5. Whatever

    You assume that it’s the exclusivity deals that are killing Lumia sales, but don’t offer any proof for that. It’s easy to assume that it’s the case, but I doubt you have anything but an educated guess on the matter. Correlation=/=causality and all that shit.

    Nokia making special variants for each carrier in the US is a necessary evil that can’t be avoided in the current market situation. When you’re only selling ~0.5M phones per quarter, negotiating with a carrier is not as easy as you’d think it’d be. Verizon will not offer subsidies or marketing push for Nokia unless they make a device for them they think they can sell.

    • What is better proof than the current sales figures!! If you wouldn’t have your most desired device at every major operator in US, you are already loosing out on a bunch of customer who will stick with a particular carrier. Not a rocket science to understand after all :P.

      • Whatever

        Yeah, world does not work that way.

        US is a very difficult and saturated market ruled by iPhone, a market that Nokia has not been able to penetrate ever, not even when Symbian ruled the smartphone world. It’s entirely plausible that there simply isn’t more demand for Lumia in the US than what’s been currently sold. It’s easy to blame the exclusivity deals for that, but until you have some data that points explicitly to it being the reason, you’re just blowing hot air.

        • Mike

          “Whatever”, your comments are exactly right on. They’ll get to the point where they don’t need to do the deals, but it’s not the time right now. It’s frustrating to many, but that’s the way it is.

  6. eeteet

    And one more thing. Nokia is moving forward too slowly. They should react faster to consumers demands.

  7. eeteet

    Yes, it is so stupid to make those exclusive deals. Only 400000 devices in USA. Europe and Asia is much bigger market for Nokia. They should launch new devices first in Europe and Asia. Americans knows only iPhone ans Samsung.

  8. eeteet

    Nokia is focusing too much to Lumias and they have forgot Ashas. Why they try to develope old S40? It can’t be competitive with Android because S40 has not proper ecosystem.

    • Mike

      eeteet, that’s an interesting concept. Many blasted Nokia for dropping symbian and going with MS and it’s established ecosystem. Now you and others are begging Nokia to drop S40. puzzling. My understanding is that full function Android requires high end components…components that low end phones do not have. Furthermore, Android, especially in the lower levels seems to be fragmented..hardly a “proper ecosystem”.. Maybe you could point me to some specific examples of a “proper ecosystem” in the markets that Asha phones compete?

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