Nokia’s full year results aren’t looking good; the company has also refused to offer the market any outlook guidance for the new financial year.
"Nokia believes it is currently not appropriate to provide annual targets for 2012." said Stephen Elop, CEO of Nokia at today’s full financial year announcement, a hardly auspicious sign.
The company announced that it has shipped 1 million Lumia handsets in the quarter and has €5.6bn in cash at the end of its fourth quarter. By comparison, smartphone leader Apple shipped 37m iPhones in its last quarter, and has $96bn in cash (see CBR’s story here).
Elop said the company has declined to issue any forecasts as "2012 is expected to continue to be a year of transition, during which our Devices & Services business will be subject to risks and uncertainties.
"Those risks and uncertainties include, among others, consumer demand for our Symbian devices; the timing, ramp-up, and consumer demand related to new products, including our Lumia devices; and further pressure on margins as competitors endeavor to capitalize on our platform and product transition," he said.
This conservative outlook is probably wise, as the company reported a fall in operating profit for the year, from €2.07bn to negative €1.07bn. Net sales fell by 9% from €42.4bn to €38.4bn.
Nokia’s infrastructure joint venture, Nokia Siemens, is also suffering and 23% of the workforce was sacked. It also acquired Motorola’ Infrastructure arm for $1.2bn, but the acquisition was tangled up in clearance issues. This also makes comparing 2010 to 2011 useless.
The company has banked much on its ‘rebirth‘ – its alliance with Microsoft to set Windows Phone 7.5 (Mango) as its mobile operating system for all new devices. Elop announced that the inhouse platform, Symbian, would be phased out. Symbian’s smartphone market share has halved in the last year, which may be symptomatic of the ‘Osborne Effect‘ as users waited for the new Mango devices.
Microsoft’s Windows Phone programme hasn’t been a success either, it still has no native Skype support (despite Microsoft owning Skype) and Windows Phone president Andy Lees was recently fired by Microsoft CEO Steve Ballmer. 2012 will very much determine whether Nokia’s gamble on Microsoft’s software pays off.
Nokia’s flagship model from the union, the Nokia Lumia 800, launched in the UK late last year (To read CBR’s review click here). It is also launching a top of the line 4G Lumia 900 in the US, the UK will be getting a 3G version also. The lower end Lumia 710 has received lukewarm reviews.
Like Research In Motion’s woes, analysts are even wondering if Nokia’s step change is already too late. Most other struggling mobile phone makers, such as Sony Ericsson, have thrown their lot in with Google’s Android, the only real competitor to Apple’s iPhone.