LONDON — Nokia, the Finnish mobile phone maker, said Thursday that its sales fell 25 percent in the second quarter of the year, as weakening demand for its low-end models continued to weigh on the company. But it narrowed its loss to 227 million euros, or $297 million, from a year ago.
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Once the world’s largest cellphone manufacturer, Nokia is trying to reignite its fortunes through a major restructuring plan that involves a long-term partnership with Microsoft.
The company has lost ground to rivals that include Apple and Samsung and is facing greater competition from cheap devices made in emerging markets like China and India.
Its second-period loss compared with a loss of 1.4 billion euros in the same quarter last year. The company’s sales fell to 5.7 billion euros. Both figures were lower than analysts’ estimates.
“When you are going through a difficult transition, you have to stay focused,” Nokia’s chief executive, Stephen A. Elop, said in an interview. “It’s hard work, but we’ve got a lot of positive things happening.”
Investors, however, disagreed, sending the Finnish company’s share price down 4.3 percent in afternoon trading in Europe on Thursday.
While Nokia remains the world’s third-largest manufacturer of cellphones, the company now relies heavily on its cheaper, low-end models, which are primarily sold in developing economies.
Almost 88 percent of the 61.1 million handsets that Nokia sold in the second quarter were these cheaper cellphones, which have fewer features than high-end smartphones. In total, its non-smartphone division reported a 27 percent drop in the number of units sold, to 53.7 million, compared with the same period last year. In countries like China, the number of phones sold fell almost 50 percent versus the second quarter of 2012.
Through its partnership with Microsoft, Nokia is trying to gain traction in the smartphone market, where phones run by Windows software currently hold less than a 4 percent market share. In a sign of growing customer interest, Nokia reported an almost doubling in sales of its Lumia line of smartphones, to 7.4 million units, during the three months through June 30 compared with the same period last year.
The figure represents the largest number of Lumia phones ever sold in a quarter by Nokia since their introduction in 2011 and follows the announcement last week of a new Lumia phone with a camera that has a 41-megapixel sensor.
But the average price of the company’s smartphones fell almost 18 percent, to 157 euros, in the second quarter, as consumers continued to prefer Nokia’s cheaper smartphone options to the company’s top-of-the-range devices.
“The market would have liked to see more phones sold, but it’s a strong figure for smartphones,” said Janardan Menon, an analyst at Liberum Capital in London. “The more worrying trend is around Nokia’s average phone price — they have to bring that figure up.”
Despite technical innovations and its ongoing relationship with Microsoft, Nokia still lags in tenth place in the smartphone market, as of the end of the first quarter, according to the research firm Gartner.
On July 1, Nokia agreed to buy Siemens’s half of their telecommunications equipment joint venture for about 1.7 billion euros, a move that analysts said would help increase the company’s short-term access to cash.
The unit, known as Nokia Siemens Networks, reported a 17 percent drop in its second-quarter revenue, to 2.8 billion euros.
[h=3]More Tech Coverage[/h] News from the technology industry, including start-ups, the Internet, enterprise and gadgets.
On Twitter: @nytimesbits.
Once the world’s largest cellphone manufacturer, Nokia is trying to reignite its fortunes through a major restructuring plan that involves a long-term partnership with Microsoft.
The company has lost ground to rivals that include Apple and Samsung and is facing greater competition from cheap devices made in emerging markets like China and India.
Its second-period loss compared with a loss of 1.4 billion euros in the same quarter last year. The company’s sales fell to 5.7 billion euros. Both figures were lower than analysts’ estimates.
“When you are going through a difficult transition, you have to stay focused,” Nokia’s chief executive, Stephen A. Elop, said in an interview. “It’s hard work, but we’ve got a lot of positive things happening.”
Investors, however, disagreed, sending the Finnish company’s share price down 4.3 percent in afternoon trading in Europe on Thursday.
While Nokia remains the world’s third-largest manufacturer of cellphones, the company now relies heavily on its cheaper, low-end models, which are primarily sold in developing economies.
Almost 88 percent of the 61.1 million handsets that Nokia sold in the second quarter were these cheaper cellphones, which have fewer features than high-end smartphones. In total, its non-smartphone division reported a 27 percent drop in the number of units sold, to 53.7 million, compared with the same period last year. In countries like China, the number of phones sold fell almost 50 percent versus the second quarter of 2012.
Through its partnership with Microsoft, Nokia is trying to gain traction in the smartphone market, where phones run by Windows software currently hold less than a 4 percent market share. In a sign of growing customer interest, Nokia reported an almost doubling in sales of its Lumia line of smartphones, to 7.4 million units, during the three months through June 30 compared with the same period last year.
The figure represents the largest number of Lumia phones ever sold in a quarter by Nokia since their introduction in 2011 and follows the announcement last week of a new Lumia phone with a camera that has a 41-megapixel sensor.
But the average price of the company’s smartphones fell almost 18 percent, to 157 euros, in the second quarter, as consumers continued to prefer Nokia’s cheaper smartphone options to the company’s top-of-the-range devices.
“The market would have liked to see more phones sold, but it’s a strong figure for smartphones,” said Janardan Menon, an analyst at Liberum Capital in London. “The more worrying trend is around Nokia’s average phone price — they have to bring that figure up.”
Despite technical innovations and its ongoing relationship with Microsoft, Nokia still lags in tenth place in the smartphone market, as of the end of the first quarter, according to the research firm Gartner.
On July 1, Nokia agreed to buy Siemens’s half of their telecommunications equipment joint venture for about 1.7 billion euros, a move that analysts said would help increase the company’s short-term access to cash.
The unit, known as Nokia Siemens Networks, reported a 17 percent drop in its second-quarter revenue, to 2.8 billion euros.