Lumia 900 price cut puts Nokia in focus, Q2 loss near quadruples on slumping sales

Nokia's net loss nearly quadrupled in the second quarter, on sagging sales of smartphones - a market in which the company is struggling to regain ground lost to rivals including Apple and Samsung.

Nokia posted a net loss of Euro 1.41 billion ($1.72 billion), compared with a loss of a Euro 368 million in the same period last year.

Decline in sales throughout the world were "more than offset" by sales of Nokia's Lumia devices, which run on the Windows software. The company said it sold 4 million Lumia devices worldwide in the quarter.

Questions arose about Lumia sales in the US earlier this week when Nokia and AT&T halved the price of the flagship Lumia 900 to $50, just three months after its introduction. Nokia called the cut "a normal strategy that is put in place during the life cycle of most phones."

Shares of the company on Thursday jumped, however, as overall sales had exceeded forecasts.

Overall sales were down 19 per cent to Euro 7.54 billion, not as low as analysts' forecast of Euro 7.36 billion, according to financial data provider FactSet. Smartphone sales were weak, however, dropping 34 per cent to Euro 1.54 billion.

The Finnish company was the world's leading mobile phone maker for more than a decade but was overtaken by Samsung in the first quarter according to research firm Gartner.

Facing stiff competition from Apple's iPhone and devices running on Google's Android software, Nokia tried to stem the decline in smartphones in part through a partnership with Microsoft announced last year, replacing Nokia's existing Symbian operating platform with Microsoft's Windows Phone software.

A drop in sales was expected during this transition period, and Nokia said that the decline of Symbian phones dragged down sales in all regions.

Nokia's global market share has steadily shrunk from the peak of 40 per cent in 2008 to 29 per cent in 2011 and is expected to dwindle further this year. Meanwhile, Nokia shares have fallen to their lowest level since the 1990's, plunging below Euro 2 in mid-June.

Nokia shares jumped 10 per cent to Euro 1.5 after the report. Analyst Mikko Ervasti at Evli Bank in Helsinki said Nokia performed better than expected in lower-end devices, shipping 84 million such units compared to market expectations of 80 million.

With inputs from Associated Press