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Nokia starts year with losses

April 11, 2012

Cellphone maker Nokia has warned that its devices and services segment will post heavy losses in the first two quarters of the current year. The Finnish firm continues to lose out to Apple and Samsung.

https://p.dw.com/p/14bkz
A Nokia staff member poses with a Nokia mobile phone
Image: Reuters

Cellphone producer Nokia of Finland looks set to post an operating loss of around three percent of sales in the first quarter of 2012, the company warned in a statement on Wednesday. It had previously expected to break even for the period from January through March.

The firm added that it expected a similar or even larger loss in the second quarter as it continues to revamp its product line in order to keep abreast of rivals Apple and Samsung. The bad news sent Nokia shares plummeting by over 18 percent on Wednesday.

The Finnish company's struggle to move into positive territory has been made harder by a data connection bug in the Lumia 900, Nokia's first 4G phone, which is currently only available in the US. Management said a software fix would be ready by mid-April.

Nokia is in the process of launching new products for Microsoft's Windows Phone operating system in order to reverse the decline of old lines running Symbian software.

Slow readjustment

"The main problem for Nokia is that appetite for Symbian handsets has evaporated, and it can't ramp up Windows Phone volumes quick enough," Canalys analyst Pete Cunningham told Reuters news agency.

Nokia still produces the largest amount of cellphones, but it lost top spot in the lucrative smartphone market last year to Apple and phones running Google's Android operating system.

The European electronics giant created the smartphone industry in the late 1990s by launching its Communicator models. Nokia was the undisputed leader in the field until Apple's iPhone entered the market in 2007. Google's Android system was released a year later.

hg/bk (dpa, Reuters, AFP)