Nokia has released their Q2 2013 earnings report, and off interest to Windows Phone fans is that the company managed to ship 7.4 million Lumia handsets, up 32% from Q1 2013, and up 85% from last year. The company is now completely reliant on Windows Phone for its smartphone volume, shipping essentially 0 Symbian devices in Q2.
Unfortunately analysts were expecting Nokia to ship 8 million Lumias, a somewhat unrealistic number given the performance of other smartphone companies over the same period. Nokia’s share price is still down more than 4% in pre-market trading in response however.
Nokia also managed to ship 53.7 million feature phones, down around 2 million from 55.8 last quarter. This was close to the number Forbes announced as tolerable for erosion of Nokia’s feature phone business.
The average price of Nokia’s smartphone mix improved year on year, due to the transition to Lumias from Symbian handsets, but decreased sequentially from 191 Euro to 157 Euro due to selling more Nokia Lumia 520s and less Nokia Lumia 920s. On the other hand over the same period Nokia’s gross margin for their smartphones increased from 20.7 to 21.1%, indicating Nokia actually makes somewhat more profit from their cheaper handsets than their more expensive ones.
Nokia’s inventory levels were normal, and had reduced sequentially, meaning the handsets Nokia shipping are selling well.
Nokia reported a loss of 115 million Euro on 5.695 billion Euro revenue, significantly less than the 826 million Euro loss from last year, and underlying operating profit. Nokia’s net cash was 4.063 billion Euro, down from 4.480 billion Euro last quarter.
Stephen Elop noted:
In our Smart Devices business unit, we continue to focus on delivering meaningful differentiation to consumers around the world. We are very proud of the recent creations by our Lumia team, from the Lumia 520 – our most affordable Windows Phone 8 product which has enjoyed a strong start in markets like China, France, India, Thailand, the UK, the US and Vietnam – to the Lumia 1020, our star imaging product which we unveiled to the world last week. Overall, Lumia volumes grew to 7.4 million in the second quarter, the highest for any quarter so far and showing increasing momentum for the ecosystem. During the third quarter, we expect that our new Lumia products will drive a significant part of our Smart Devices revenue.
Given Nokia’s numbers I expect a 10 million quarter for Windows Phone will elude in Q2, but I suspect with a million handsets each from HTC and Huawei could bring us close to the 9 million mark.