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With Microsoft about to take the reins, Nokia sees sales slump (+video)

Sales of Nokia Lumia smart phones are down. Bad news for Microsoft?

The Nokia handsets business that Microsoft is due to take over saw sales continue to slide in the fourth quarter as its Lumia smartphones failed to draw business away from larger competitors like Apple and Samsung. The devices and services unit, which will be transferred to Microsoft Corp., saw sales fall to 2.6 billion euros from 3.7 billion euros a year earlier. The unit recorded an operating loss of 198 million euros compared with a profit of 97 million a year earlier.
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In the third quarter of 2013, Nokia sold 8.8 million Lumia handsets – a record for the Finnish company. But in the fourth fiscal quarter of last year, Lumia sales fell 8.2 million units. 

The disappointing numbers were not made public in a new Q4 report from Nokia that showed a significant slump in its handset business, but Nokia reps later confirmed the figures to The Verge and other outlets, including the Wall Street Journal.  

"On the upside," writes Preston Gralla of Computerworld, "the 8.2 million Lumia devices sold was about double from a year previous. Optimists may say this means that the glass is half full, not half empty. But let's face it, with Lumia sales dropping during the holiday buying season from the previous quarter, at this point there's not even much water in the glass." 

 

The subtext here is the impending multi-billion dollar sale of Nokia's mobile division and rights to many of its patents to Microsoft. The deal between the two tech titans was first announced in September and approved by Nokia shareholders in November. The weak quarterly report comes as Microsoft prepares to take over the reins of Nokia's smart phone and tablet operations. 

So is Microsoft starting to feel a little queasy about being saddled with the Nokia brand? Well, as Sami Sarkamies, an analyst with Nordea, points out, it's far too late for regrets. 

"Microsoft bought the handset division, so of course they are interested in what shape they will get it," Mr. Sarkamies told the AFP in an interview this week. "But the decision (to take over the handset business) has been made. Even if the fourth quarter has gone badly, there's no stepping back."

In related news, this month Nokia launched its jumbo-sized Lumia 1320 phablet in some European and Asian markets. But reviewers have been largely unimpressed. "Without any standout features, the Lumia 1320 is about as mediocre a smartphone as you can get – and just about as forgettable, too," writes Brad Molen of Engadget. 

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