Supply Problems For the Nokia Lumia ?

Supply Problems For the Nokia Lumia ?

Nokia admitted the growth of its Windows Phone smartphone business has been held back by supply problems after it feared a potentially costly stockpile of unsold Lumia handsets.

The Finnish giant today revealed financial results that were ahead of most analysts’ expectations to break even, but said its performance in the booming smartphone market was limited by short supplies of its flagship device, the Lumia 920.

Chief executive Stephen Elop said Nokia was “still dealing with [supply] constraints”  having been “very deliberate” and “thoughtful” about how it introduced the Windows Phone 8 device in November.

In Britain, for instance, the Lumia 920 is only available on the EE network following an exclusive deal, limiting sales.

Mr Elop said the firm would have sold more Lumia handsets if it could have met the demand.  “The shortage was not only cause by cautious ordering”, he added, but there had also been a lack of adequate supplies of some components.  “[We are] working with suppliers and operators to work through the situation today,” Mr Elop said.

Nevertheless, Nokia’s the fourth quarter was widely seen as solid as the firm aims to regain ground lost to rivals particularly in the smartphone market.

Total Lumia sales reached 4.4 million, up from 2.9 million in the third quarter and Nokia shares roses as much as 18 per cent on the news.

“This is clearly very positive news from Nokia as it both shows that the company’s new Lumia product launches are performing well,” said Louis Landeman, an analyst at Danske Bank.

Nokia, which used to dominate the smartphone market with its Symbian devices, still lags a long way behind leaders Samsung and Apple, however.

Samsung sold around 62 million smartphones in the fourth quarter, and Apple 27 million.

As part of its fightback plan, Nokia has made deep cuts in an effort to improve margins. Mr Elop has slashed more than 20,000 jobs and closed production and research sites.

In the next quarter, Nokia predicted its handset division would make a loss of 2 per cent of sales.

Source The Telegraph