Nokia released its Q1 2013 interim report on Thursday and revealed $7.7 billion operating income with a loss of $150 million.
The tech company’s lowering net losses come at a time when its Lumia smartphone line has witnessed a 27 percent sales increase over the previous quarter. According to the Finnish smartphone maker, the Windows 8-based smartphones passed the 5 million mark for the first time, reaching 5.6 million units in total.
According to Nokia CEO Stephen Elop:
“At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row … While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well.”
Nokia used the non-IFRS method to report an operating margin of 3.1 percent for $236 million.
While Nokia’s losses have shrunk, the company has still failed to penetrate the US market. Nokia sold 61.9 million total handsets worldwide including feature phones. Of those devices, only 400,000 were sold to US customers.
Much of the mobile device hopes for Nokia surround penetration of the Chinese mobile market and markets in developing markets where feature phones are still very popular because of their lower cost of entry.
If Nokia can attract customers in emerging markets, it could potentially carve out a stronghold in those regions and then convert customers to more expensive smartphones as local economies become more profitable.
The Nokia Lumia smartphone line has received modestly strong reviews and Microsoft has managed to chip away, albeit slowly, at the smartphone market in the United States.
In the meantime, Nokia is still actively engaged in a period of operations contraction that has witnessed thousands of layoffs and plant closures as the company looks to trim its fat.
Do you think the Nokia Lumia line is Nokia’s big saving grace during a period of sluggish sales?