Nokia's improving Lumia shipments stalled during the fourth quarter, bad news for Microsoft, which will soon take over the phone unit.
The Finnish company reported fourth-quarter sales of 3.48 billion Euro (US$4.75 billion), down 21 percent year-on-year, and a net loss of 615 million Euro, down from 3.1 billion Euro a year earlier.
Having won shareholder approval of the pending sale of its Devices & Services business to Microsoft last November, Nokia isn't including that part of the company in its total numbers, instead reporting that business as discontinued operations in its fourth quarter.
Revenue for the Devices & Services business was 2.6 billion Euro, down 29 percent year on year.
For the first time, the company also didn't break out in its earnings report how many phones it sold, including its range of Windows Phone-based Lumia products. However, the company said on its earnings call that it sold 8.2 million Lumia phones during the quarter. That's up from 4.4 million a year ago, but down from 8.8 million in the third quarter.
The fourth quarter is traditionally a strong one for phone vendors because of the holiday shopping season, so the smartphone sales drop is disappointing and bad news for Nokia and Microsoft, according to Francisco Jeronimo, research director for European mobile devices at IDC. Before the fourth quarter, Lumia volumes had continually increased last year.
The deal with Microsoft is expected to close before the end of March. Once Microsoft has taken control, it has many decisions to make, including brand alignment, how the devices business should be structured within Microsoft, and the level of autonomy it should have, Geoff Blaber, CCS Insight's vice president of research for the Americas, previously said.
Now it also has to add a way to increase smartphone shipments, if it wants Windows Phone to survive.
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