It seems that Microsoft’s new deal with Nokia was a much more needed move by the Finish telco than by the computing giant that brought us the Windows platform. While Microsoft is now boasting record full-year profits, Nokia has experienced “clearly disappointing’ results for Q2 of 2011.
First the good news. It appears that despite some of the snide press Microsoft has been receiving since the launch of its Windows Phone platform the reality of the situation is quite different: Microsoft is making more money than ever. At the end of last fiscal year (June 30) Microsoft reported a record-breaking figure of US$69.9 billion; up a full 12% from the previous year.
Of course Microsoft has its fingers in many pies, but this is still good news for the Windows Phone platform in the smartphone market. If Microsoft saw losses, or even an unsatisfactorily small rise, then the blame would quite possibly have fallen on the head of the fledgling OS. Now, however, Windows Phone should hopefully be in better shape than ever.
These figures, coupled with the new Windows Phone 7.5 Mango update soon to be released, Microsoft is looking like it could really step up and become a serious competitor in the smartphone market.
On the other front Nokia is not seeing such positive results.
Nokia’s Q2 numbers are out and it’s not looking good for the Finnish giant. Most notably, Nokia’s operating profits are down an astonishing 44% with a loss of almost half a billion Euro when compared to the previous year’s numbers (€391 million compared to €704).
Of course Elop tried to slap a positive spin on the whole thing.
"The challenges we are facing during our strategic transformation manifested in a greater than expected way in Q2 2011. However, even within the quarter, I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business. Most importantly, we are making better-than-expected progress toward our strategic goals."
via Stephen Elop: CEO of Nokia
But even Elop couldn’t help but mention that "[Nokia’s] Q2 results were clearly disappointing".
Things aren’t looking too much better for Nokia over the next two quarters, either. Elop himself recognised that the market had become a battlefield of mobile platforms, rather than the devices themselves. Although Nokia’s first “Sea-Spray” Windows Phone device is being eagerly awaited by tech junkies around the world it’s still a long ways off, with the device not shipping in bulk until early 2012. While it’s true that Elop is hopeful for a Q4 2011 release, such a release would have a very limited number of handsets and would likely do best in bolstering demand, rather than generating immediate sales.
It looks like Nokia is going to have to batten down the hatches and weather another storm or two until things start looking up. We definitely hope that the first Nokia Windows Phone will be a winner, if only to provide more variety in the marketplace and save thousands of Nokia employee jobs.
What do you think? Does Nokia have a game-saving move up their sleeve with the switch to the Windows Phone platform, or did they realise they were standing on a burning platform just a bit too late?
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