Nokia sold its mobile and tablet business, but it's not dead yet. After almost 150 years of transitioning through making paper, tires, generators, and now phones, Nokia is starting a new era this week. The company's future is refocused on network infrastructure and mapping with its latest earnings report highlighting exactly why it sold its phone division to Microsoft. The software maker is taking on responsibility for more than 90 percent of Windows Phone sales, but it has inherited a device and services division that isn't performing well.
Although Nokia is vague about precise sales, device revenues were down 30 percent from last year, from €2.77 billion ($3.84 billion) to €1.93 billion ($2.68 billion), and losses rose from €120 million ($166 million) to €326 ($452 million). Nokia primarily attributes the huge dip in revenues to falling sales of regular phones, but does note that sales of its smartphones, the majority of which are Windows Phone Lumia devices, also fell.
Phones have cost Nokia billions while other divisions flourished
From this quarter onwards, a troubled devices and services division is no longer Nokia's problem — it's Microsoft's. Over the past few years, the division has cost Nokia billions, while other sides of the company's business have improved dramatically. Restructuring and refocusing has seen less consumer-oriented divisions like Nokia Siemens Networks (network infrastructure) and Here (mapping) turn into profitable businesses. Without the flailing mobile phone business, Nokia has been a fairly healthy company for some time, and this quarter was no different. Overall, it posted a profit of €240 million ($332 million) for Q1 2014; without the phone business, that figure would've been over €500 million ($840 million).
Nokia has been through many transitional periods in its almost-150-year history, and this week is no different. With a new CEO, Rajeev Suri, on board, it now looks set to transition away from the consumer market almost entirely, only maintaining an indirect presence through Here maps. The Nokia business that made millions of phones may now belong to Microsoft, but the Nokia that has been a huge part of Finland's economy and national identity will live on.
Tom Warren contributed to this article.