Nokia said to be reducing Lumia orders in run up to Windows Phone 8 launch

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Nokia’s primary Lumia ODM, Compal Communications, saw its revenues sink 39.5% on month to NT$3.474 billion (US$116 million) in June due mainly to a large reduction in orders from Nokia, according to industry sources, reports Digitimes.

Analysts are expecting Nokia to have difficulty selling the Windows Phone 7 Nokia Lumias in the absence of an upgrade to Windows Phone 8, with RBC Capital Markets analyst Mark Sue expecting Nokia to potentially write down billions in unsold inventory to clear channels for the Windows Phone 8 Lumia launches.

Of course I expect Nokia knew full well that the Lumia range will be facing this issue in Q3 2012, and as evidenced by Compal’s troubles are managing their inventory accordingly. In addition, as has been evidenced by the performance of the Lumia 800 in UK recently, the market is still responding very well to price cuts, which should continue to move inventory for at least the next few months.

Being a primary ODM for Nokia, Compal is expected to begin to feel the impact from July and likely to see its revenues tumble by a double-digit rate in the third quarter of 2012, Digitimes’s sources estimated.

On the other hand, Compal should see a boost towards the end of Q3 as Nokia ramps up for a major push with the launch of a new set of Windows Phone 8 handsets over the holiday season.

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