Nokia Corporation (ADR)(NYSE:NOK) did not have a good start in the FY 2014 due to a decline of 30% in the sales of its mobile devices. The mobile device unit was already under trouble and, therefore, on this Friday, it was officially sold off to Microsoft Corporation (NASDAQ:MSFT). The revenue for last year Q1 was 3.1 billion euros and has fallen down to 2.6 billion euros in the first quarter of 2014. The net loss for the Finnish company for last year was 272 million and has fallen down to 239 million euros, as reported by the company.
Windows based OS – Not a success
Nokia Corporation (ADR)(NYSE:NOK) was once a leader in the mobile phone market with 40% market share in 2008. The market of smartphones is now been captured by Apple’s iPhone, Google Inc.’s Android OS and other competitors from Asia that are cheaper. Nokia has not been able to face the challenge, and failed it its attempt as the demand for its mobile phones is not sufficient to make it a profit making enterprise.
Nokia Corporation (ADR)(NYSE:NOK) tried to gain back its position in the mobile market and teamed up with Microsoft in 2011. The smartphone maker replaced its old operating system with a Windows based operating system. The Lumia range of cell phones, also, did not go well with the customers and received a very cold response. This did not help to boost the sales and it continued to fall.
New segment, new CEO
Last week, Nokia Corporation (ADR)(NYSE:NOK) had completed the 5.44 billion-euro deal with Microsoft. As per this deal, it sold its devices and services division to Microsoft Corp. Not only this, it also sold a license to a portfolio of patents. With the closure of the deal, the company has announced new strategies and appointments. They also released their quarterly earnings for Q1 of 2014.
Nokia Corporation (ADR)(NYSE:NOK) has few other operations to focus on such as networks, mapping services and technology development and licenses. The company has, also, appointed India born Rajeev Suri as the new CEO, who was head of NSN and had played a crucial role in its success. Suri turned it into a profitable division from an unprofitable one.
Along with streamlining their operations, Nokia, also, had to keep their investors intact. The company has announced extra dividends worth 1 billion euros and share buyback plans worth 1.25 billion euros for this.