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Nokia sees improving Windows Phone sales and shrinking loss in Q1

The company sold 5.6 million Lumia devices running Windows Phone in the first quarter

Nokia's sales of smartphones running Windows Phone continued to grow in the first quarter, and its net loss shrank year on year, even as overall revenue declined.

The company reported first-quarter sales of €5.85 billion (US$7.63 billion), down 20 percent year-on-year, and a net loss of €272 million, smaller than the year-earlier loss of €928 million.

Nokia sold a total of 61.9 million mobile phones during the first quarter, of which 6.1 million were smartphones (including 5.6 million Lumia devices). A year earlier, it sold 82.7 million phones, of which 11.9 million smartphones, and more than 2 million of those were Lumia devices. (Nokia does not categorize phones in its Asha range, even the touch-screen models, as smartphones.)

Since then, Lumia's fortunes have gone up and down: Nokia sold 4 million in the second quarter; 2.9 million in the third quarter and 4.4 million in the fourth.

Sales of smartphones running Windows Phone during the first quarter came on the back of the products Nokia launched at the end of last year, including the Lumia 920, according to Geoff Blaber, analyst at CCS Insight. The low-end Lumia 520 and Lumia 720, which the Finnish phone maker announced in February at Mobile World Congress, have yet to have an effect on the numbers.

"The likes of those lower end devices we expect are going to have a more positive impact during the second quarter," Blaber said.

Even if Nokia is moving in the right direction, it can't afford to rest on its laurels. There are two things the company now needs to add, according to Blaber.

"First of all, there is still a gap between where Windows Phone stops and where Asha starts, so there are still lower price points it needs to address. Second of all, there is also a requirement for a more differentiated flagship, high-tier device with a more premium metal finish," Blaber said.

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