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Nokia sees improved fortunes in Q4

Phone maker Nokia has turned itself around in the mobile market thanks to unexpectedly positive holiday sales.

The Finnish company announced that it sold 4.4 million Lumia smartphones in the fourth quarter, up from 2.9 million in the months before.

In total, Nokia's net sales reached about £3.2 billion, shipping 86.3 million devices in just three months.

"We are pleased that Q4 2012 was a solid quarter where we exceeded expectations and delivered underlying profitability," CEO Stephen Elop said in a statement.

"We focused on our priorities and as a result we sold a total of 14 million Asha smartphones and Lumia smartphones while managing our costs efficiently."

It turns out that Nokia's decision to bank on the Windows Phone 8 operating system was the right move. Following a £467 million loss in Q3, the company unveiled in September two new Lumia devices running on the Microsoft-built OS.

Nokia chalks its newfound success up to better-than-expected financial performance among its mobile phones business unit, specifically the Lumia smartphones. Additionally, lower-than-expected operating expenses helped offset costs.

It also helps that the company initially estimated that its fourth quarter operating margin in its mobile phone business would land around minus 6 per cent. Instead, it was between break-even and 2 per cent, Nokia said.

Full details on the company's quarterly financials will be available 24 January.

The first quarter of 2013 likely won't meet the same standards, though, based on the lack of seasonal shopping and intense competition from Apple and Samsung. Plus, Nokia's efforts to overcome supply constraints could set the company back again.