Lumia Sparks Nokia Q4 Resurgence

by Matt Klassen on January 16, 2013

With investor confidence at an all-time low, 2012 saw sweeping changes within both Nokia’s management structure and product focus. Taking an uncharacteristically humble approach to its success in the mobile market, new CEO Stephen Elop admitted that the Finnish company had made some significant missteps, promising a paradigm shift that would see Nokia once again become a competitive mobile player.

While Elop’s intentions were sound, market analysts doubted that such a turnaround was possible, given the fact that Nokia’s stocks continued to plummet as investors fled like rats from a sinking ship. But the company’s Q4 numbers have seemingly given the once dominant mobile brand a stay of execution, as finally Nokia’s Lumia experiment seems to be paying off.

Of course, while one profitable quarter has some optimists pointing to a brighter future for Nokia, difficult questions about Nokia’s long term profitability remain, meaning this latest good news may be simply nothing more than an anomalous blip on the company’s continued downward slide.

Regardless of whether Nokia’s optimistic Q4 results are a sign of resurgence or a last gasp in the company’s death throes, it does point to one ironclad truth: people are buying the Lumia brand. When Stephen Elop put the company’s two mobile operating systems to pasture in favour of a partnership with Microsoft to employ the latter’s untested Windows OS many saw the move as a strategic blunder, a sure sign that Nokia’s days were numbered. But now at least some analysts and investors are rethinking their outright dismissal of the Finnish company, bolstering the company’s ever-weakening stock price.

This optimism, like an unusual emotion around the usually stoic and mildly arrogant Finnish company, sent Nokia’s stocks soaring up nearly 19%, with reports that smartphones sales, once the weakest point of the company, are surging forward on the back of the company’s popular Lumia line-up. There were ongoing questions about the company’s cash flow going forward, but such concerns were at least temporarily waylaid by the first sign that Elop’s radical restructuring plan seems to be finally paying off.

But of course such unbridled optimism often breeds equal parts pessimism, and it’s those in the latter camp who still warn of storm clouds on Nokia’s horizon. While there’s no question that Lumia has garnered some success in a cutthroat mobile market, many still wonder if Nokia can maintain the momentum, as little has been said about the company’s follow-up to its original Lumia line.

In the end, Nokia is still in the midst of its radical restructuring, as it continues to selloff assets in an effort to find some sort of equilibrium, meaning it’s far too early to say what one optimistic quarter really means. While this recent upturn justifies some optimism, given that the company still has many questions surrounding its ever-dwindling cash flow and its long term mobile strategy, Nokia may not be out of the woods yet.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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