Nokia results not persuading critics of its Windows Phone strategy

Nokia’s recent quarterly results have not been enough to persuade some critics of a turnaround at the company, led by the recent release of its Windows Phone 8-based Lumia 820 and 920 smartphones.

As SmartComapny reported last week, in results for the quarter ending December 2012, Nokia reported profits of €202 million, ($A258 million) compared to a loss of €1.076 billion for the same quarter last year.

However, total worldwide mobile phone sales for Nokia stood at 335.6 million units in 2012, down 20% from 417.1 million in 2011.

The year-on-year falls were particularly acute for its smartphone division, despite the introduction of the company’s new Windows Phone 8-based Lumia 820 and 920 smartphones, with volumes falling by 55% to 35.1 million units from 77.3 million units in 2011.

In a recent blog post, former executive Tomi Ahonen has launched another attack on current CEO Stephen Elop over ongoing declines in mobile phone and smartphone sales against strong competition from Apple and Samsung.

“On February 9, 2011, looking at … fiscal year 2010, Nokia’s new CEO sees Nokia is more than twice as big as its nearest rivals including Apple’s iPhone – and Nokia grew more in 2010 than Apple, so the gap between Nokia’s smartphone and Apple was increasing,” Ahonen says.

“Apple was not catching up; Nokia was pulling away from Apple. Nokia set a world record in growth in smartphones in 2010. Nokia did this profitably.

“How profitably? Nokia set a Nokia-record in growth in revenues and a Nokia record in profits in its smartphone unit – and the Nokia profitability in the smartphone unit grew towards the end of the year, setting also a Nokia quarterly growth record. Nokia’s smartphone revenues were second largest in the industry behind only Apple’s, and Nokia’s profits were also second largest in the industry, behind only Apple’s.”

Ahonen claims the situation changed after Elop made the decision to abandon the company’s Symbian and MeeGo platforms in favour of Windows Phone.

“Then let’s fast-forward 12 months. Nokia has announced the new strategy by Elop. The Nokia record-setting growth in smartphone unit sales, turns into a world-record collapse in smartphone unit sales. Nokia proceeds to set a world record fall in smartphone revenues in that year. And Nokia produces its first-ever loss in the smartphone unit – thus a Nokia record failure in the unit that is supposed to deliver the future to Nokia.”

Ahonen points the finger of blame squarely at Elop’s Windows Phone strategy.

“The Windows [smartphone] ecosystem is dead; it is the sixth of six, literally the smallest in existence. It has not been growing, it has been shrinking,” Ahonen says.