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Nokia will invest in new materials and new technologies for upcoming Windows Phones, targeting higher-priced handsets as well as more affordable models to broaden Lumia’s appeal. “It takes a tremendous amount of work to break through as the third ecosystem” CEO Stephen Elop said on Nokia’s financial results call today, after announcing a $1bn operating loss for Q2 2012, but was confident that Microsoft’s announcement of Windows Phone 8 – and limited upgrade potential for existing Lumia devices – would not necessarily ruin Nokia’s Q3.

Microsoft announced Windows Phone 8 last month, outlining the new smartphone OS’ shared kernel with Windows 8, but also confirming that any current Window Phone 7.x device would not get an upgrade. Instead, they’ll have to make do with Windows Phone 7.8, a halfway-house of UI tweaks that makes the current platform look like WP8 but lacks the underlying technologies.

However, Nokia believes that will not necessarily be a drawback. “What we’re very focused on communicating right now is that existing owners – and people who buy devices tomorrow – will be very clear what they’re getting from Windows Phone 8″ Elop said in response to questions as to users might be confused. In fact, the company has seen activation of Lumia handsets as being ”stable to up” in the period after Windows Phone 8 was announced.

“We have to carefully communicate, the updates and upgrades we are providing for the existing devices are anticipated not just up to Windows Phone 8 but after Windows Phone 8 ships” Elop conceded. “We will continue to sell existing Lumia devices beyond Windows Phone 8, in some cases for quite a while. We’re working very closely with developers … to ensure application development flow continues across the platforms.”

Nokia’s estimates for Q3 are roughly in line with those of Q2, though plus-or-minus 4-percent. That relatively broad range, Elop explained, is because of the degree of uncertainty around how Windows Phone 7 will be impacted by the new incoming version.

Nokia: We’re committed to new materials, new tech, and supporting existing owners is written by Chris Davies & originally posted on SlashGear.
© 2005 – 2012, SlashGear. All right reserved.

Microsoft continues to pay Nokia more to use Windows Phone than the struggling Finnish firm pays in software royalty fees, its been confirmed, though Nokia still predicts similar struggles in the next quarter. As in previous quarters, Nokia is paid €250m ($307m) each three month period by Microsoft in “platform support payments” and the Finns estimate that “the total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitments.”

“Our agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. In the second quarter 2012, we received a quarterly platform support payment of USD 250 million (approximately EUR 196 million). Under the terms of the agreement governing the platform support payments, the amount of each quarterly platform support payment is USD 250 million. We have a competitive software royalty structure, which includes annual minimum software royalty commitments. Minimum software royalty commitments are paid quarterly. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US dollars. The total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitments. In accordance with the contract terms, the platform support payments and annual minimum software royalty commitment payments continue for a corresponding period of time” Nokia

Nokia and Microsoft have always been coy on exactly how much is charged of each OEM to use Windows Phone devices, but the takeaway here is that right now it’s not costing Nokia anything to put the platform on its handsets. In fact, Microsoft is in effect subsidizing Nokia’s losses.

As for the immediate future, Windows Phone 8 won’t arrive soon enough to turn around Q3 2012. Nokia is predicting a similar batch of numbers to what it announced today, with Q3 expected to be roughly on a par with Q2′s performance give or take 4-percent.

What could make a difference is if Lumia Windows Phone sales continue to rise at the same pace. Nokia announced shipments of 2m handsets in Q1 2012, and 4m in Q2, so the platform is certainly going in the right direction; unfortunately for the company’s bottom line, that success was offset significantly by losses in all divisions – including NAVTEQ and other services – and the continued dwindling of interest in Symbian phones.

However, the fact that current Lumia handsets won’t get an upgrade to Windows Phone 8 may well scupper the rise in interest, if the mass market figures out that it’s buying into what amounts to a dead-end range. AT&T recently halved the price of the Lumia 900 to $49.99 on contract, though Nokia insists that doing so is standard market practice given where the device is in its lifespan.

Nokia: Microsoft pays us more than we pay them (but Q3 will still be dire) is written by Chris Davies & originally posted on SlashGear.
© 2005 – 2012, SlashGear. All right reserved.

Nokia may have roughly doubled Windows Phone sales quarter-on-quarter, but the company is still struggling to make an impact on the North American market, shipping just 600,000 handsets in the country. According to Nokia’s Q2 2012 financials [pdf link], the US and Canada were by far the least interested in the company’s wares, with Asia-Pacific leading the volumes of devices and services sales (with 28.6m units).

Symbian continues to slide, meanwhile, blamed for much of Nokia’s issues. Symbian’s difficulties in penetrating the North American market to begin with meant it was the only region not particularly impacted by the OS’ decline. “All regions showed a significant year-on-year decline in the second quarter 2012 except for North America,” Nokia reported, “where the sharp decline in sales of Symbian devices was more than offset by sales of our Lumia devices.”

Meanwhile, year-on-year average smartphone selling price increased, thanks to Windows Phones being generally more expensive than their Symbian counterparts. ASP was €186 ($229) in Q2.

However, all is not good in Nokia’s gross margin: a “significant” year-on-year and sequential decline was down to “approximately €220 million of allowances related to excess component inventory, future purchase commitments and an inventory revaluation related to our Lumia, Symbian and MeeGo devices” the company says.

AT&T recently halved the price of the Lumia 900 in the US, now offering the smartphone for $49.99 on a new, two-year agreement. However, the handset will not be upgraded to Windows Phone 8, instead only getting the Windows Phone 7.8 halfway-house update.

Nokia: Just 600,000 phones sold in North America is written by Chris Davies & originally posted on SlashGear.
© 2005 – 2012, SlashGear. All right reserved.

The past three months haven’t been the best for Finland’s former world number one. It hasn’t been helped by the three biggest credit agencies lowering the company’s bond rating to “junk,” and the Lumia 900’s violently slashed price. Unfortunately the latest results reveal continuing gloom: the manufacturer made an operating loss of $1.01 billion dollars for the quarter. The company managed to make €7.5 billion in sales ($9.2 billion, down .5 billion since the last quarter), shifting four million Lumia handsets in the process. In fact, the only cause for optimism is that sales of the Lumia range have roughly doubled each quarter.

The number of handsets pushed out the door increased (thanks to the Asha range of budget phones) with the company selling 73 million phones. That said, the company has clearly failed to crack America, selling a paltry 600,000 handsets in the States. The cash pile has also continued to dwindle, with the piggybank currently standing at €4.1 billion ($5.1 billion), down from $6.3 billion in Q1, despite getting a further $250 million in kickbacks from Microsoft. Unsurprisingly, the prediction for the third quarter of the year was similarly dour, summed up rather euphemistically as “difficult.”

Filed under: Cellphones

Nokia’s Q2 2012 financials: 4 million Lumias sold, $1.01 billion dollar loss originally appeared on Engadget on Thu, 19 Jul 2012 06:01:00 EDT. Please see our terms for use of feeds.

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Nokia used to be a mobile phone giant that did not seem as though they could do any wrong. Back in their heydays, just about anything and everything that Nokia rolled out turned into pure gold, regardless of whether it targeted the entry level crowd or the high end fashionista movement. Well, it seems that a leaked Nokia phone design has started to make its rounds around the Internet, featuring an unknown segment located right above the display. It might be a D-Pad, but knowing how Nokia was burnt from their previous N-Gage experience, I doubt that they would take the gaming smartphone route yet again.

One cannot say that these designs hail from the previous century, as they started to appear in October last year, so from then since until now, perhaps Nokia’s engineers might have done their bit to make the necessary modifications before getting this particular phone design a final push to the mass market. What do you think Nokia will do with this design? Image courtesy of Nokia Port.

By Ubergizmo. Related articles: Nokia Lumia 900 gets a price drop to $49.99, Nokia Transport for Windows Phone no longer in beta,