Nokia have today announced a hefty loss on its overall earnings for the year ending December 2011. Nokia, which recently partnered with Microsoft to feature Windows Mobile on its range of smartphones, reported a loss of $1.4 billion in a sharp contrast to the $980 million profit it made in a similar period 2010. This loss is attributable to a cocktail of issues that conspired to hand Nokia the huge loss it has incurred. Top of these is the 29% drop in phone sales during 2011, a loss factor that was accentuated by the fact that profit margins on phones fell from 12% in 2010-2011 to a low of 3.4%.

Another issue that may have contributed to the loss may be the change over from Symbian to Microsoft Windows. This decision saw Nokia having to retire the aged OS and retrofit new devices to run Windows Mobile. But it has not been all doom and gloom. Nokia have reported that they have already sold in excess of 1 million Lumia 800 devices to date and that the phone has been well received in the North American and European markets. Nokia also hit a milestone this month when they reported they have sold 1.5 billion Series 40 Nokia phones to date with the 1.5 billionth device being sold in Brazil.

Image via CrunchBase

The introduction of the iPhone and a plethora of Android devices has seen Nokia’s market share in the smartphone market depreciate steadily over the years and Nokia have been on the lookout for a suitable partner to help them crack the smartphone market.  Having partnered with Microsoft, who are seen as old hands and the key to the North American smartphone market, Nokia may be poised to report very different earnings come next year this time, especially if they can keep up the momentum gained with the Lumia 800 and release better and smarter phones and perhaps somewhere down the line, a tablet.

About Daniel Mbure

Daniel is a writer, strategist and serial tech entrepreneur. Follow Daniel on Twitter @thespianic