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Jan. 26 (Bloomberg) -- Nokia Oyj, a year into an alliance with Microsoft Corp. to try to win back market share lost to Apple Inc., sold more smartphones last quarter than analysts predicted, boosting confidence in its ability to compete.
Nokia delivered 19.6 million smartphones that can handle tasks such corporate e-mail and playing movies, including the Lumia models that went on sale in November, the Espoo, Finland- based company said today. That’s about 1 million more than the average estimate of analysts. Apple sold 37 million iPhones in the same period.
“There might be a bit of relief there because people were very concerned after Apple results that Nokia would have to warn significantly more,” said Alexander Peterc, an Exane BNP Paribas analyst in London. “It’s less about the quality of earnings themselves and more to do with the relief that it’s not worse.”
Chief Executive Officer Stephen Elop is betting Nokia can sell Microsoft-based Windows Phones fast enough to compensate for the 10-year-old Symbian line it’s phasing out. Nokia’s Lumia, which started selling in Europe and are expanding into markets such as India and China where the smartphone battle is its early stages, sold more than 1 million units to date, Nokia said.
“In the war of ecosystems, clearly there are some strong contenders already on the field,” Elop said in a statement. “And with Lumia, we have demonstrated that we belong on the field.”
Nokia shares rose as much as 29.2 cents to 4.35 euros and traded 2.7 percent higher at the 6:30 p.m. close in Helsinki.
The company nominated Risto Siilasmaa, the founder and chairman of Finnish security software maker F-Secure Oyj, as its next chairman, succeeding 61-year-old Jorma Ollila. Marko Ahtisaari, Nokia’s design chief, was promoted to executive vice president and will report directly to Elop.
The fourth-quarter net loss was 1.07 billion euros ($1.4 billion), or 29 cents a share, weighed down by a 1.1 billion- euro impairment charge on the map unit. Sales declined 21 percent to 10 billion euros as deliveries of lower-priced handsets shrank 1 percent to 93.9 million units.
Chicago-based Navteq Corp., which Nokia agreed to buy in 2007 for $8.1 billion, added a map database as well as a business selling mapping services to other companies. Nokia reorganized it together with advertising and other services into the Location & Commerce division which began operating in October.
Nokia began selling the 420-euro Lumia 800 smartphone in six European countries in November, followed in December by the 270-euro Lumia 710 in Hong Kong, Taiwan, Singapore, India and Russia. The U.S. will get the Lumia 900 from AT&T Inc, while T- Mobile USA is already selling the Lumia 710. Nokia plans to release Lumia phones in China in the first half.
“The worst fears are wiped away with the comment of well over 1 million to date,” said Michael Schroeder, a Helsinki- based analyst with FIM Bank. “There’s still a lot of uncertainty because in absolute terms these are very small volumes so much more is needed to be able to project longer term development, which is where the investor focus is now.”
The world’s largest handset maker since 1998 with market shares as high as 40 percent, Nokia had a 23.9 percent share of overall handset sales in the third quarter, Gartner Inc. estimates showed. In smartphones, Nokia fell behind Samsung Electronics Co. and Apple last year, Strategy Analytics said.
Elop, 48, is also refreshing Nokia’s cheaper handset lines, which have declined against competition from Asian manufacturers. The company introduced the colorful Asha line, which includes dual-SIM handsets, in October, and is revamping its low-end software to run more apps and compete better against cheap Android handsets.
Adjusted operating margin for the handset business climbed 0.1 percentage point to 4.9 percent in the quarter from the previous period, Nokia said today. The company forecast the business will be around break even this quarter. It didn’t give an annual target, citing its transition and macroeconomic uncertainty.
Apple said this week it more than doubled quarterly net income to a record of $13.1 billion. In December, about 45 percent of U.S. shoppers who bought a smartphone in the previous three months said they purchased an iPhone, and 47 percent chose Google Inc.’s Android, according to the Nielsen Co.
Nokia Siemens Networks, the network-equipment venture with Siemens AG, had an operating profit of 67 million euros. The venture received a cash injection of 1 billion euros from its parents last year.
--Editors: Kim McLaughlin, Kenneth Wong
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