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Nokia hangs on, but announces $1.5 billion loss

Jeff Horwich Jul 19, 2012
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Nokia hangs on, but announces $1.5 billion loss

Jeff Horwich Jul 19, 2012
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Jeff Horwich: Nokia was, until this year, the world’s biggest maker of cell phones. And today it turned in a $1.5 billion quarterly loss — triple what it lost the same time last year. Nokia just slashed the price of its new headline handset, the Lumia 900.

Nokia has major fans and detractors and we’ve got one of them here — we’ll find out which she is. Annette Zimmerman is a principal analyst with Gartner Research, and she’s with me from Munich, hello.

Annette Zimmerman: Yeah, very good to be here, thank you.

Horwich: What’s the biggest news to you out of Nokia’s earnings announcement today?

Zimmerman: Well, I think it was probably not so surprising to see these results, given what he had earlier from the company. And one part that was good to see was that the volumes of Lumia devices have picked up, so that was encouraging. 

Horwich: Nokia’s operating system for its new phones is based off of the new version of Windows or it will be. How much will Nokia’s future success depend on whether people like Windows 8?

Zimmerman: Well, I think Nokia has a lot to offer as far as differentiations, they have certain types of services that other vendors do not have. For example, I’m talking here about location based services — this is something that users will definitely look at and it’s very good value for the money.

Horwich: But, of course if people don’t like the new Windows operating system, they are not going to want a new phone?

Zimmerman: That’s right, but there were very, very positive results on the usability of the Lumia device. And I think the other thing that Nokia has is very good design. If you look at the phones — the Lumia 800 or 900 — they’re great pieces of work. So this is definitely a capability that Nokia can excel on. 

Horwich: It sounds to me like you are considerably more sanguine about Nokia’s prospects than the gloom and doom coverage that we see. What are other people not seeing that you are?

Zimmerman: So I definitely see the caution here with the company at the moment, as everyone else, but in general I think that there are some good things about Nokia definitely that this company has and that other companies right now in the market that are also struggling don’t have. 

Horwich: You might wind up looking like the wise sage here when this is all said and done, we’ll see. Annette Zimmerman is a principal analyst for consumer markets and technology with Gartner Research. Thank you very much.

Zimmerman: Thank you. 

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