Nokia: 5.6 Million Lumia Windows Phone Devices Sold In Q1

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Nokia today announced that they have sold 5.6 million Lumia Windows Phone devices in Q1 compared to 4.4 million units in sales last quarter. In the second quarter 2013 supported by the wider availability of recently announced Lumia products, Nokia expects the sequential growth in Lumia unit volumes to be higher than the 27% sequential growth in the first quarter 2013.

On Smart Devices sales, Nokia mentioned the following in their quarterly report,

Volume:

During the first quarter 2013 we shipped 6.1 million Smart Devices units, of which 5.6 million units were Lumia products and 0.5 million units were Symbian products. In the first quarter 2013, approximately two-thirds of our Lumia volumes were Windows Phone 8-based products.

The year-on-year decline in our Smart Devices volumes in the first quarter 2013 continued to be driven by the strong momentum of competing smartphone platforms and our portfolio transition from Symbian products to Lumia products. The decline was primarily due to lower Symbian volumes, partially offset by higher Lumia volumes.

On a sequential basis, the decrease in our Smart Devices volumes in the first quarter 2013 was primarily due to lower Symbian volumes, partially offset by higher Lumia volumes as we started shipping the Lumia 620 in significant volumes and broadened the geographical distribution of the Lumia 920 and Lumia 820. On a geographical basis, Lumia volumes increased sequentially in all regions except for North America.

Average Selling Price:

The year-on-year increase in our Smart Devices ASP in the first quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products, partially offset by our pricing actions which commenced in the second quarter 2012 primarily related to our Windows Phone 7-based Lumia products.

Sequentially, the increase in our Smart Devices ASP in the first quarter 2013 was primarily due to a positive mix shift towards sales of our Windows Phone 8-based Lumia products, partially offset by price erosion. The ASP of our Lumia products in the first quarter 2013 was EUR 182, compared to EUR 192 in the fourth quarter 2012.

Gross Margin:

The year-on-year increase in our Smart Devices gross margin in the first quarter 2013 was primarily due to the positive mix shift towards higher gross margin products, the reversal of approximately EUR 50 million of previously recognized inventory related allowances related to our Windows Phone 7-based Lumia products, cost erosion of materials we use in our products and lower Symbian fixed costs per unit. This was partially offset by the pricing actions we commenced in the second quarter 2012 primarily related to our Windows Phone 7-based Lumia products, as well as a net negative impact related to foreign currency fluctuations and higher warranty costs. From an operating system perspective, the year-on-year increase in our Smart Devices gross margin in the first quarter 2013 was due to a higher gross margin for our Lumia products, as well as for our Symbian products.

On a sequential basis, the increase in our Smart Devices gross margin in the first quarter 2013 was primarily due to a positive product mix shift towards higher gross margin products, as well as the reversal of approximately EUR 50 million of previously recognized inventory related allowances related to our Windows Phone 7-based Lumia products. This was partially offset by greater price erosion than cost erosion, a net negative impact related to foreign currency fluctuations and higher warranty costs.

During the first quarter 2013 our Windows Phone 8-based Lumia products generated a gross margin, somewhat above the overall Smart Devices gross margin of 20.7%.

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