In Increasing Sales of Its Lumia Phone, a Rare Bright Spot for Nokia

The company, based in Espoo, Finland, on Thursday announced a 24 percent decline in its second-quarter sales, to 5.7 billion euros, though it narrowed its second-quarter losses to 227 million euros, or $298 million, compared with a loss of 1.4 billion euros a year earlier.

The losses were lower than analysts’ estimates.

It is the eighth time in the last 10 quarters that Nokia has reported a net loss. The company saw a glimmer of light in the doubling of sales of its Lumia smartphone line. But Nokia, once the world’s largest cellphone maker, now ranks third behind Samsung and Apple and faces mounting competition from cheap devices made in emerging markets like China and India.

“When you are going through a difficult transition, you have to stay focused,” Nokia’s chief executive, Stephen A. Elop, said in an interview. “It’s hard work, but we’ve got a lot of positive things happening.”

Investors, however, disagreed, sending the company’s share price down 2.7 percent in trading in Europe on Thursday.

While Nokia remains one of the world’s largest manufacturers of cellphones, the company now relies heavily on its cheaper, low-end models, which are primarily sold in developing economies.

These devices represented almost 88 percent of the 61.1 million handsets that Nokia sold in the second quarter. They have fewer features than high-end smartphones, which are much more profitable to sell. Growing competition from rivals in emerging markets, many of which use Google’s Android software, is eating into Nokia’s earnings.

In total, the company’s non-smartphone division reported a 27 percent drop in the number of units sold, to 53.7 million, compared with the same period last year. That is almost half the number of phones that Nokia reported at the end of 2011.

In countries like China, where a growing middle-class population is clamoring for new phones, the number of devices sold by Nokia fell almost 50 percent versus the second quarter of 2012.

“There’s no good news at the lower end of the market,” said Roberta Cozza, a research director at Gartner in London. “The problem is that there are so many local emerging market players looking to build up market share.” Nokia also said on Thursday that it would cut up to 440 additional jobs from the division.

Faced with cutthroat rivals for its cheaper phones, Nokia also is trying to gain traction in the high-end smartphone market through its partnership with Microsoft. The strategy is proving difficult to execute.

Smartphones running Windows software hold less than a 4 percent market share, compared with 74 percent that use the Android operating system, according to Gartner.

Yet, in a sign of some growing customer interest, Nokia reported sales of its Lumia line of smartphones almost doubled to 7.4 million units during the three months through June 30 compared with the same period last year.

The figure represents the largest number of Lumia phones sold in a quarter by Nokia since their introduction in 2011. Last week, the company announced a new Lumia phone with a camera that has a 41-megapixel sensor.

Analysts welcomed the rising number of Lumia sales. But they raised concerns that the average price of Nokia’s smartphones fell almost 18 percent, to 157 euros, in the second quarter.

“The market would have liked to see more phones sold, but it’s a strong figure for smartphones,” said Janardan Menon, an analyst at Liberum Capital in London. “The more worrying trend is around Nokia’s average phone price. They have to bring that figure up.”

The main cause for the reduced average price was related to consumers’ continued preference for the company’s less advanced smartphones, instead of its top-of-the-range devices.

Nokia said that it expected its third-quarter phone sales to outpace those for the period just ended.

State of the Art: Nokia Lumia 920 and HTC Windows Phone 8X Are Great, and Yet

Because competition drives innovation. Innovation leads to improvement. Improvement begets happiness.

In the tech world, some companies do their most innovative work when their backs are against the wall — especially Microsoft. Last month, it took the wraps off Windows Phone 8, the most polished edition yet of its beautiful, crystal-clear software for touch-screen phones. (My review of Windows Phone 8 is at http://j.mp/Qqfz2F.)

Unfortunately, as a Microsoft product manager told me understatedly, “We have an awareness problem.” Translation: Nobody is buying Windows phones. And since nobody’s buying them, nobody’s writing apps for them. And since nobody’s writing apps — well, you can see where this is going.

Still, Microsoft isn’t giving up. This month, Windows Phone 8 arrives aboard two fascinating new phones: the Nokia Lumia 920 ($100 with a new AT&T contract) and the HTC Windows Phone 8X ($200 from AT&T, Verizon or T-Mobile).

It’s funny about Nokia and HTC; they, too, are fallen giants. Nokia was the world’s largest cellphone maker for 14 years straight; not anymore. At the moment, it’s in seventh place among smartphone makers. It has shed tens of thousands of employees. HTC is struggling, too, having sold 36 percent fewer smartphones this year than last.

How intriguing, then, that HTC and Nokia have each chosen Microsoft as its savior, and vice versa. Loser + loser = winner?

Yes, actually. The two new phones have a lot in common — for one thing, they’re both awesome. For another, both have bigger, sharper screens than the iPhone’s famous Retina screen. (The HTC and Nokia phones have 4.3- and 4.5-inch screens. That’s 1,280 by 720 pixels, packed in 341 and 332 to the inch.)

Both have rounded backs and edges, which make them both exceptionally comfortable to hold. (The curve also makes it easy to pull them out of your pocket the right way.)

Both come in a choice of bright colors. Both phones have the same blazing fast processor. Both can get onto their respective carriers’ 4G LTE data networks (meaning very fast Internet), in the cities where those are available.

And get this — both of these phones can also charge without being plugged in. That’s right: magnetic charging is finally built right into phones. Come home at the end of the day, throw your keys in the bowl, set the phone down on the charging pad (a $50 option) — and a little chime tells you that it’s happily charging, even though no cable is in sight.

It’s pretty great. It will become even greater if this charging method (an industry standard called Qi, pronounced chee) catches on. Someday there may be charging surfaces at coffee shops, airports and hotel rooms. (Only the Verizon version of the HTC phone has this feature turned on — not the AT&T or T-Mobile versions.)

Both phones also have built-in NFC chips. These allow near-field communications, which means “this phone can do things when you tap it against another gadget.” The promise is that you’ll be able to tap on a cash-register terminal to pay for something; tap against an NFC-enabled bus shelter ad to download promotional goodies; tap two phones together to transfer a photo or address; and tap against a Bluetooth speaker to “pair” it with the phone.

In practice, there’s more to it than that. Unfortunately, the tap only introduces the phones; Bluetooth or some other technology is needed to complete the connection. And Microsoft’s coming tap-to-pay initiative is incompatible with the one Google has spent millions of dollars setting up at cash registers across the land. But we can always hope.

The HTC Windows Phone 8X is the smaller of the two new phones, but even so, it dwarfs the iPhone — it’s wider, taller, heavier and thicker. If you get the Verizon model, your Internet experience will be faster and better in more cities than on the Nokia phone, which is available only on AT&T.

The back panel is faintly textured, so you’re less likely to drop this phone than you are the shiny-backed Nokia. But the buttons — power, volume, camera — are skinny and utterly flush with the phone’s body; you practically need an ice pick to push them in.

Bits Blog: Nokia’s New Lumia Is an AT&T Exclusive

Ángel Franco/The New York Times The Nokia Lumia 920 will be available only at AT&T stores.

Nokia’s new flagship smartphone, the Lumia 920, will go on the market next month, and in the United States it will be available only on AT&T.

This story is familiar: Last time, AT&T was the only American carrier to sell Nokia’s flagship Lumia 900, which didn’t sell well. So why does AT&T keep getting the goods?

To be fair, the iPhone was initially an exclusive for AT&T. That worked out well for Apple because the carrier, in exchange, aggressively promoted the then-revolutionary smartphone in its stores and ad campaigns to give it a big boost. Later, the iPhone became available on Verizon Wireless, Sprint and many other carriers around the globe to become the best-selling smartphone in the world.

For Nokia, however, the odds are stacked against it. The smartphone market is crowded with iPhones and many popular Android phones. And Nokia’s Lumia phones include a less-popular feature: Microsoft’s Windows Phone operating system. Pairing with one carrier won’t give it the same push that Apple got.

Nokia and AT&T have not disclosed a price for the Lumia 920.

Susan Sheehan, a Nokia spokeswoman, said in an interview that the company was glad that AT&T had committed to marketing the Lumia 920 and training retail employees on selling the phone. She hinted that there would be partnerships soon with other carriers but declined to go into detail about what phones the deals would be for.

“We are really excited about the commitment that AT&T is expressing for the 920, and we think that it’s going to be a great launch with them,” she said. “At the same time, there’s a lot of passion and energy from customers across the United States, so we’re looking forward to making other announcements with different operators in the weeks and months to come.”

Nokia very likely gave AT&T the exclusive to get its marketing support, which could make or break the device because people may not have heard of it otherwise, said Jan Dawson, a mobile analyst at Ovum. In addition, the Finnish phone maker has a poor track record for making good phones for CDMA, the technology used by Verizon’s and Sprint’s cell networks, so it’s unlikely those carriers wanted to sell the Lumia 920 at all, Mr. Dawson explained.

With the Lumia 900, Nokia’s previous flagship phone, AT&T backed it with what it called its biggest phone introduction in history, which included giant posters in stores, TV commercials and even a Nicki Minaj concert. After all that, Nokia sold only 600,000 Lumia 900 phones and later cut the price of the smartphone in half.

Apple, on the other hand, recently sold five million  iPhone 5s on the first weekend the model arrived in stores.

Rumor: Lumia 920 and Galaxy Note 2 Coming October 21

Nokia and Samsung got us all excited when they announced their top-of-the-line phones for the fall - the Lumia 920 and the Galaxy Note 2. But both events were soft-releases; i.e. they failed to mention anything about when we can buy the things or what they'll cost.

If a report over at BGR is right, Nokia's Windows Phone 8 flagship and Samsung's latest "phablet" beast will be available the same day: October 21st.

AT&T hasn't confirmed the leak, because that kind of thing just never happens, but the article cites a "trusted source" who (we're willing to bet) works for the carrier. This wouldn't be the first time a wireless provider leaked a high-profile release date.

Will the phones be available from other carriers on the same day? That would certainly make sense given how hard they're being pushed. And Samsung has previously stated the Galaxy Note 2 will come out sometime in October.

Can you wait 'til late next month for the Lumia 920 or Note 2? Let us know in the comments.

Jon Fox is a Seattle hipster who loves polar bears and climbing trees. You can follow him on Twitter and IGN.