Nokia Sinking Fast As Consumers Shun Their Phones

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Nokia is set to sink to the bottom of the smartphone market with a plan to develop cheap phones in an effort to turn around their fortunes.Last night the struggling European phone Company reported a $1.76 billion dollar loss which is down from a $577 million operating profit a year ago. The Company admitted that sales have slumped worldwide resulting in their head of worldwide sales quitting the company

Nokia has admitted that consumers are shunning basic Nokia phones and turning increasingly to cheap smartphones powered by Google’s Android operating system.

Stephen Elop, chief executive of Nokia, said sales of the new Lumia range has been mixed and he plans to “deeply” lower their prices to spur sales and compete with Asian rivals in emerging markets.

Nokia’s first-quarter operating margin at its largest Devices & Services unit was a negative 5.2% according to IFRS accounting standards. Nokia said the margin, excluding special items, was negative 3% and it expects a similar or lower level in the second quarter.

The company said it shipped 82.7 million devices in total in the first quarter, down from 108.5 million devices the same quarter last year. Volumes in China fell 62%, North America fell 50% and Europe was down 32%.

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