Nokia Q3: Lumia Sales Not Happening

Nokia announced Q3 earnings yesterday. The company lost 969 million euros or $1.27 billion. It reported sales of 2.9 million Lumia smartphones during the quarter, which was down from 4 million in Q2. CEO Stephen Elop attributed the sales decline to the announcement and impending arrival of Windows 8 and a delay in consumer purchases accordingly. 

Nokia sold 3.4 million Symbian handsets for a total of 6.3 million overall smartphone sales in Q3. However Symbian has been discontinued as the company focuses exclusively on Windows Phones. Nokia CFO Timo Ihamuotila said the following about Nokia device sales in Q3:

Our Smart Devices net sales decreased 37% sequentially due to lower Lumia and Symbian net sales. This was partially offset by higher overall Smart Devices ASPs. Looking at our Lumia volumes in more detail, we saw a sequential decrease in shipments to 2.9 million units, with declines in all regions except for Middle East and Africa. From a product-level view, we saw sequential growth in the lower-priced Lumia offering, more than offset by declines elsewhere in the Lumia portfolio.

The evidence suggests that Nokia continues to have success at the lower end of the market but at the higher end it's struggling. Nokia's Elop promises this will change with the release of the Nokia Lumia 920, its first Windows Phone 8 smartphone. 

In the US AT&T will reportedly have an exclusive for six months on the handset. Presumably that was in exchange for aggressive promotion and placement in AT&T stores. We'll see if that helps but I'm quite skeptical. 

I don't think there's any reason to believe that Nokia will sell a great many more Lumia 920 handsets than it has sold of earlier models this past year. The company should have pursued a dual path with Android and Windows Phones. Of course Microsoft wouldn't have permitted that and still been willing to turn over hundreds of millions of dollars to Nokia in support. 

Nokia has lost in excess of 4 billion euros since it announced its partnership with Microsoft. And it doesn't appear that the hemorrhaging is over yet.