John Paczkowski

Recent Posts by John Paczkowski

Nokia’s Q1 Question Mark

Nokia_lumia900launch

Nokia / Flickr: NokiaOfficial

Back in 2011, Nokia teetered on the brink of irrelevance, having stumbled badly in the smartphone market it helped create. Its business was a gruesome collage of slumping sales, mounting losses and layoffs.

Two years later, the scenario is quite different, and Nokia’s once-bleak outlook is no longer quite so disheartening. Sales of Nokia’s new smartphone line, Lumia, powered by Microsoft’s Windows Phone OS, while not spectacular, have been rising, carrying the company’s fortunes with them. When it last reported earnings, Nokia posted a profit for the first time in seven quarters. So what can we expect when the company reports first-quarter financials later today?

Decent news, considering this quarter is a seasonally weak one for Nokia. Consensus calls for a loss of about five cents — an improvement over the 10 cent per share loss it posted in the same quarter a year ago. Meanwhile, quarterly shipments of the company’s Lumia phones are expected to hit 5.6 million units, up from 4.4 million in the fourth quarter.

If Nokia hits those numbers, it will offer further proof that a comeback isn’t entirely out of the question. With rising smartphone sales and improving finances, the company can buy more time to execute the turnaround strategy that CEO Stephen Elop has mapped out for it.

“Nokia has been largely headed in the right direction,” RBC analyst Mark Sue said. “Smartphone units may grow 26 percent year-over-year in calendar 2013 with growth driven by emerging markets, where Nokia is well positioned and Nokia is tailoring Lumia/Asha smartphones for features vs. affordability just as smartphone demand shifts to the mid-tier/low-end. … Nokia needs to continue to innovate in order to compete more effectively with other players in the smartphone market as Samsung, Apple, Sony, HTC, BlackBerry and others have revamped or are in the process of updating their flagship models.”


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