More Proof That Nokia Has a Better Shot Than BlackBerry

Over the past couple of years, Nokia (NYSE: NOK  ) and BlackBerry (NASDAQ: BBRY  ) have been the two prime turnaround candidates in the competitive smartphone market. Both companies had fallen from grace, but were looking to reclaim relevance. Of the two, Nokia has emerged as the player with a better chance at a successful turnaround, although it's still very much a chance at this point.

Nokia's Lumia lineup continues to perform decently in the face of a slow season for smartphone sales and intense competition. The company just reported 7.4-million unit shipments in the second quarter, a sequential increase from the 5.6 million Lumias shipped last quarter. However, that was still shy of the 8.1 million Lumias that analysts were calling for.

Nokia's transition to Microsoft (NASDAQ: MSFT  ) Windows Phone as its primary platform is now complete -- Symbian is now completely out of the picture.

Source: Nokia.

As Lumia grows, so does Windows Phone's position in the market. Microsoft's platform has now overtaken BlackBerry as the No. 3 operating system. The software giant is also expanding its carrier and OEM partnerships, possibly adding LG to the mix in the near future.

Both Nokia and BlackBerry have bet their turnarounds on next-generation operating systems and, in this respect, Nokia's turnaround has progressed much farther than BlackBerry's. The Canadian vendor only sold 2.7 million BlackBerry 10 units last quarter, which thoroughly disappointed investors. Even if you include all of BlackBerry's 6.8 million smartphone units, Nokia's Lumia has BlackBerry beat.

Better than bad doesn't mean good
Unit volumes are just part of the overall picture, though, which remains dreary. Total revenue fell 24%, to $7.5 billion, which translated into a net loss attributable to shareholders of $297 million. Mobile phone shipments, including feature phones, were 53.7 million, while investors were hoping for 56.2 million.

The Nokia Siemens Network, or NSN, segment improved its adjusted operating profit significantly, to $429 million. Nokia is in the process of buying out Siemens' stake, which will allow it to keep more of the black ink to itself, but will also further add to Nokia's debt burden at a time when it's still facing a cash crunch. Operating cash flow was negative $256 million, and Nokia's total cash position declined by $785 million.

With Nokia shares opening in the red today, investors aren't impressed with the overall results. It doesn't take much to have a better chance than BlackBerry, though.

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  • Report this Comment On July 18, 2013, at 8:49 PM, jwyoungy wrote:

    So it's first out of the gate wins? BlackBerry sold 2.7 million BB 10 phones in the first full quarter of it's availability and it was only one premium priced phone for all but 2 weeks (Q 10 released about 2 weeks before the quarter ended). As a comparison, Nokia seems to have only sold about 1 million Luma's in its first quarter, 2 million in its second quarter, 4 million in the third and back down to 2.5 in the forth quarter. Why don't we compare that number? BB 10 is brand new and Blackberry has an image problem that it needs to address and that is not fixed in 4 months. The next 3 quarters will tell the story about BlackBerry but you can't say that just because after 7 quarters Nokia sold more phones with a brand new platform and OS than blackberry did is just plain foolish.

  • Report this Comment On July 18, 2013, at 10:36 PM, neogodless wrote:

    Nokia sold 7.4 million Lumia (Windows Phone) smartphones this quarter. This was only the second full quarter for Windows Phone 8, which was a relatively major overhaul from Windows Phone 7. While the design change was not radical, several key features were added, and more importantly, the entire kernel/core was transitioned from the aging CE over to NT.

    Take a look at the trends: http://www.theverge.com/2013/7/18/4534266/nokia-lumia-vs-bla...

  • Report this Comment On July 19, 2013, at 7:59 AM, will1946 wrote:

    Comparing nokia with blackberry is not so encouraging.

  • Report this Comment On July 19, 2013, at 11:47 AM, MPF94025 wrote:

    You may want to rethink this article after today's news.

    http://finance.yahoo.com/blogs/breakout/microsoft-slammed-9-...

    MS has numerous mobile products that no on really wants. And there is nothing exciting about the Win 8 mobile platform. It's place as the #3 smartphone OS will likely be short lived.

    Take your pick, a Nokia device with a tiresome OS or a BB10 device with a brand new OS that is finding its legs.

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