Finnish smartphone giant Nokia is passing through a difficult phase as its revenues from phone sales have slumped. So bad is the situation that even after the launch of the latest brand of Lumia phones slumping sales of the other phones are becoming too overwhelming to be suppressed.
However, Nokia has a sufficient cash reserve which makes it position not too difficult. In a report Nokia’s losses for the three months ending June 30th grew to €1.41 billion compared to the €368 million which it had the last year at the same time. This is significantly higher than what the industry watchers had predicted at €654 million. However riding on the patent licenses that Nokia has along with the payment they received from Microsoft, their cash positions improved by €306 million YOY.
The company’s CEO Stephen Elop admitted while mentioning that the company is going through a transitionary phase and that it is expected that the third quarter to be just as tough as the previous. Nokia has mentioned that the third quarter will have repeat of the negative 9.1% trend that is seen in the non-IFRS operating margin from Devices & Services segment of its business. However, having said that, Nokia is focused on turning things around and making sure that their revenues are on the positive side of the chart in the forthcoming quarters.
Nokia was once the most dominant house in the cell phone market. However, they were slow to start on the lucrative smartphone market, a reason why it lost out the initial advantage to tech giants such as Apple and Samsung. Recently, it teamed up with Microsoft and started designing smartphones based on the Windows Phone operating system after years of working with the in-house Symbian operating system. The result is the launch of the Lumia line of smartphones, which have received great reviews however somewhere did not match up the expected sales figures that the company wished for.