Nokia’s Lumia devices may finally be gaining traction in North America, where success has until now been scarce and is so badly needed.
The company sold 8.8 million Lumias worldwide, buoyed by increased demand in North America, which sold 1.4 million units alone. This is up 400% over the same period last year, and nearly 300% over last quarter, where they sold just 500,000.
The success can be attributed mainly to one model, the low-cost Lumia 520. It sells for between $150 and $200 in Canada, depending on the carrier, and is free on a 2-year term, becoming the go-to vehicle for customers upgrading from a feature phone to a smartphone.
Nokia is still hurting from lower sales in other regions, and less demand for its products overall. The company sold 64.6 million devices overall, including 55.8 million feature phones, but the real problem is falling ASP, or average sale price. That number, now at EUR 45, is dropping due to the need to lower prices to stay competitive. The success of the Lumia 520, while laudable, has brought down the ASP of smart devices to EUR 143 ($206 CDN) from EUR 157 ($226 CDN), and operating margin sits at -3%, down from -1.2% last quarter.
While the company eked out an operating profit of around EUR 215 million ($309 million CDN), it was lower than last quarter, with revenue flat at EUR 5.6 billlion ($8.13 billion CDN). Much of that success, and profit, comes from outside the handset business as HERE, the company’s mapping business, and NSN, the mobile broadband division, made money this quarter.
With the company’s Devices & Services division moving to Microsoft in 2014, Nokia’s balance sheet is likely going to be lighter on red but short on interesting data. Let’s hope Microsoft facilitates Nokia’s, and the Lumia brand’s, rise in North America.