Nokia’s Lumia 920 has distinctive colourful cases fronted by a big, vivid display. Photo: Nokia
Nokia's push to expand sales of its Lumia smartphones in new markets such as China should help shrink an overall revenue decline and reduce its first-quarter loss, easing some of the pressure on CEO Stephen Elop.
Quarterly results on Thursday are also expected to show a turnaround at communications equipment venture Nokia Siemens Networks (NSN), bolstering Nokia's bottom line and supporting the shares' recovery from last year's record low.
While analysts say Nokia has yet to prove it can survive in an industry increasingly dominated by Samsung and Apple, a slow but steady improvement in finances may buy more time for Canadian chief executive Elop as he attempts to implement his turnaround strategy.
Nokia is pinning its hopes on Lumia phones, which use Microsoft's Windows software. Since signing a deal late last year to sell Lumias in China, it has launched cheaper versions of the smartphone to cater to a global market of price-conscious but tech-savvy consumers.
While Nokia recently launched 15€ phones to shore up its position in basic handsets, its long-term success is seen as hinging on smartphones, both due to their higher margins and because more consumers, including those in emerging markets, are demanding access to apps like Twitter from their phones.
"Its visibility is really poor, and of course there's still a possibility that the Windows strategy will fail. We don't know," said Michael Schroder at Finnish investment group FIM.
"But the base case assumption now is that volumes will gradually come up as the geographical coverage distribution gets wider and product portfolio moves towards lower price points."
While that is hardly a bullish endorsement, it underscores a shift in the market's view of the Finnish mobile phone marker, which a few quarters ago was under pressure to drop its Windows Phone strategy, as well as its CEO, if sales failed to pick up.
Analysts on average forecast first-quarter net sales to fall 11.8 per cent from a year earlier to €6.48 billion ($US8.49 billion), according to a Reuters poll, a more moderate decline than the 19.6 per cent drop reported in the previous quarter.
Quarterly shipments of Lumia phones are seen at 5.6 million units, up from 4.4 million in the fourth quarter.
NSN GAINS STRENGTH
Nokia's underlying loss, which excludes special items, is seen shrinking to €0.04 per share from €0.08 per share a year earlier.
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