Nokia on Thursday provided an interim financial report for the fourth quarter and full year 2013. For the quarter, the firm earned a profit of $556.7 million on net sales of $4.8 billion, both sharp increases from the same quarter a year earlier. The firm sold 8.2 million Lumia handsets in Q4 and more than 30 million in all of 2013.
The firm ended the year with $12.3 billion in cash assets, relatively unchanged from the same time a year ago.
"The fourth quarter of 2013 was a watershed moment in Nokia's history," Nokia Chairman Risto Siiasmaa noted in a prepared statement. "Having received overwhelmingly strong support from our shareholders at our extraordinary general meeting in November for the sale of our phones business to Microsoft, we are diligently working toward defining Nokia’s future direction."
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That direction includes its Nokia Solutions and Networks (NSN), HERE, and Advanced Technologies groups, which Nokia said delivered a "healthy" operating margin of 12 percent in the quarter. Nokia also revealed that Samsung had entered into a five-year technology patent-licensing agreement with it, though the value of this deal is subject to pending arbitration.
Of course, many are curious how well Nokia's Windows Phone handsets performed in the quarter and in all of 2013. These devices were placed under a new category in the interim financial report called "discontinued operations," indicating that its sale of these device lines to Microsoft is pending.
There were very few details about Lumia in the report.
Suggesting that sales had dropped slightly quarter-over-quarter, the report blamed "intense smartphone competition at increasingly lower price points and intense competition at the low end of our product portfolio." Nokia also sells Nokia-branded "dumb" phones and entry-level Asha smartphones, neither of which are based on Windows Phone. Both are being sold to Microsoft.
However, in a separate conference call, Nokia confirmed that it sold 8.2 million Windows Phone-based Lumia handsets in the quarter. That's a huge leap over the 4.4 million Lumias it sold in the same quarter a year ago, but a step back from the 8.8 million in sold in Q3 2013. (Normally, device sales aren't compared quarter-to-quarter, but it's unusual for a consumer electronics product line to fall short in the holiday sales quarter.) For all of 2013, Nokia sold more than 30 million Lumia handsets, up 44 percent from the 13.3 million it sold in 2012.
Nokia attributes the growth of Lumia to a maturation of the Windows Phone ecosystem.
"Lumia smartphones continued to benefit from a growing Windows Phone application store, with key applications including Instagram, Waze, and Vine announced during the year. Nokia itself launched new applications such as Nokia Storyteller, Beamer, and Video Director." Microsoft delivered three OS updates to Windows Phone 8 in 2013, as well, and each was accompanied by Nokia firmware updates and new apps.
Nokia also launched some new Lumia products in the final quarter of 2013, suggesting that the pending sale to Microsoft did little to curtail its aggressive product introduction pace from the full year. These included the Lumia 1520 and 1320 "phablet" handsets and the Lumia 2520 tablet, which runs on Microsoft's Windows RT 8.1 OS.