Feature Phones Still Four Out of Every Five Sold by Nokia
Nokia sold 86.3m devices in Q4, 2012, according to its preliminary results, bringing in €3.9bn in revenue, and achieving ‘underlying profitability’ for the company. As a result of the announcement, the company's shares jumped by 17.8 per cent.
70.3m of those devices, nearly four out of every five sold, were feature phones. 15.9m (18 per cent) were smartphones, with the Asha model its largest selling handset for the quarter, at 9.3m.
4.4m Nokia Lumia handsets were sold, delivering a ‘better than expected’ result, but in spite of this - and the media and marketing attention that's been focused on the Windows Phone handsets - they only make up five per cent of handsets sold. The remaining 2.2m were smartphones running the Symbian OS.
Smart or dumb?
The figures initially announced by Nokia were a little confusing so we went back to them with a few questions. Revenue and units sold were broken down into two subsets - 'Mobile Phones' (79.6m units sold) and 'Smart Devices' (just 6.6m).
The latter includes Lumia and Symbian devices, but not Nokia's Asha range, the latest of which are touchscreen 3G devices intended to compete with low-end Android devices. The reason behind this is that the Asha devices were developed by the Mobile Phones part of the business, and so their sales are calculated alongside its traditional feature phone handsets.
“The key to understanding this is that the devices made by our Mobile Phones unit, which has traditionally made feature phones, have been getting smarter over time,” said a Nokia spokesperson. "Consequently, its newest product line of Asha full touch products are now regarded as fully-fledged smartphones, both by us and GfK. The line between feature phones and smartphones has of course been blurring for some time.”
As time goes on and even developing countries adopt smartphones, presumably this part of the business will either have to close, or merge with the Smart Devices unit.
Grouped together, Nokia's feature phones and Asha handsets brought in revenue of approximately €2.5bn, with €1.2bn generated from sales of Lumia and Symbian handsets. These numbers are disproportionate to the amount of devices sold, for the obvious reason of smartphones being sold at a higher price.
The company also received recurring income from intellectual property of around €50m, and says that operating expenses were lower than expected due to restructuring. Based on these results. Nokia has changed its operating margin forecast from -6 per cent to 'breaking even, or even a +2 per cent increase'.
Seasonality is expected to have a negative impact in Q1 2013.