Over the last three months, it saw a 19 per cent drop in sales, with smartphone shipments in particular falling 34 per cent. Despite dominating the mobile industry for most of the 2000s, Nokia has struggled to remain competitive, as the likes of Apple and Samsung began to lead the smartphone market.
Stephen Elop, the company’s CEO, said the loss can be attributed to "greater than expected competitive challenges."
"We are navigating through a significant company transition in an industry environment that continues to evolve and shift quickly. While this was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources,” Elop said.
Paradoxically, the company’s stock, which has plummeted 80 per cent since February 2011, benefitted from the announcement. Shares of Nokia have shot up nearly 18 per cent at last count, likely because the company’s second-quarter losses were not as catastrophic as predicted by analysts.
In an effort to up its position in the smartphone industry, Nokia, under Elop’s leadership, dropped its Symbian operating system in favour of Microsoft’s Windows Phone platform last year. Though Nokia forecasts another loss in the third quarter, the launch of Windows Phone 8 this autumn and the imminent release of new handsets designed to run that platform could help the company get on the road to recovery.