Finnish mobile phone giant Nokia Thursday posted narrowing losses and said its flagship Lumia phone was gaining traction, but shares in the company tumbled after sales of low-end phones fell more than expected.
Helsinki: Finnish mobile phone giant Nokia Thursday posted narrowing losses and said its flagship Lumia phone was gaining traction, but shares in the company tumbled after sales of low-end phones fell more than expected.
The troubled company reported a 272 million euro (USD 355 million) net loss in the first quarter of the year, down from a 928 million euro loss in the same period last year.
But sales were down 20 percent from a year earlier as basic, low-end phones faced competition from affordable smartphones in emerging markets.
"While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well," chief executive Stephen Elop said in a statement.
Nokia's Devices and Services division reported a 32 percent revenue decline to 2.888 billion euros, after it was hit by a 21 percent volume decline in low-end mobile phones.
The number of smartphones sold fell by 49 percent, but the sales decline was partially offset by a rise in the average selling price.
Nokia has bet its future on its Lumia smartphones, which aim to rival Apple's iPhone and Samsung's Galaxy. The company said a 27 percent volume rise to 5.6 million units reflected "increasing momentum" for the flagship handset family.
Although Lumia was gaining traction with customers, its market share was still small, analysts said.
"Lumia sales are above expectations (but) Apple sold 40 million phones in the same period," Eric Beaudet, an analyst at French investment bank Natixis, told AFP.
Joint venture Nokia Siemens Networks (NSN) performed better than expected, swinging to a three million euro profit from a one billion euro loss a year earlier.
Nokia said it expects Lumia sales to accelerate in the second quarter, but cautioned that the company's profit margins would suffer amid continued investment in Lumia and higher operating costs.
Nokia was the world's number one mobile phone maker for more than a decade but lost that title to Samsung in 2011.