Nokia on Wednesday lowered its first quarter 2012 guidance for its Devices and Services group and noted disappointing estimated financial results from the division. Nokia also confirmed that it has already sold 2 million units of its Lumia-branded smartphones, however, and that momentum is expected to grow during the quarter.
“Our disappointing Devices & Services first quarter 2012 financial results and outlook for the second quarter 2012 illustrates that our Devices & Services business continues to be in the midst of transition,” said Stephen Elop, President and CEO of Nokia. “Within our Smart Devices business unit, we have established early momentum with Lumia, and we are increasing our investments in Lumia to achieve market success. Our operator and distributor partners are providing solid support for Windows Phone as a third ecosystem, as evidenced most recently by the launch of the Lumia 900 by AT&T in the United States.”
Nokia attributed the poor first quarter to “competitive industry dynamics, which negatively affected net sales in the Mobile Phones and Smart Devices business units, particularly in India, the Middle East and Africa and China.” It also noted gross margin declines in its smart devices unit.
The company estimates that its Devices & Services unit had net sales of EUR 4.2 billion for the quarter, including EUR 2.3 billion in mobile phone net sales (71 million units), EUR 1.7 billion in smart device net sales (12 million units), and EUR 0.2 billion in Devices & Services “other” net sales.
Nokia said it will continue to invest in its Lumia line of smartphones and hopes to deliver the phones to additional markets as quickly as possible. “We are continuing to increase the clock speed of the company,” said Stephen Elop, President and CEO of Nokia. “The change is tangible, and we are proud of the way Nokia employees are quickly responding to the needs of consumers and partners.”
Nokia’s Q1 results will be released on April 19th.