Nokia, the former giant of the cell phone business, today reported earnings for Q1 and they showed that the transition under new CEO Stephen Elop will be a difficult one. Nokia reported huge losses of 1.34 billion euros (or $1.768 billion) as sales dropped 29 percent overall, 52 percent for smartphone devices.
We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. Over the last year we have made progress on our new strategy, but we have faced greater than expected competitive challenges," Elop said in the company's statement.
"We have launched four Lumia devices ahead of schedule to encouraging awards and popular acclaim. The actual sales results have been mixed. We exceeded expectations in markets including the United States, but establishing momentum in certain markets including the UK has been more challenging," Elop said.
"At the same time, the lower price tiers of our industry are undergoing a structural change, and traditional feature phones are challenged by full touch devices. As a result we are taking deliberate measures to continue to renew our Series 40 platform, and we plan to strengthen our line-up in Q2 2012. We are making investments in our Mobile Phones business unit aimed at addressing the gaps in our offering."
Nokia reported that it had sold 11.9 million smartphones in the quarter, versus 24.2 million a year ago. Smartphones actually account for a smaller percentage of total mobile sales that they did a year ago (14.4 percent versus 22.3 percent).
Nokia's cash reserves also tumbled 24 percent as the company sought to finance its transition and deal with its losses.