During its quarterly financial earning report, Nokia revealed that it sold about 8.8 million Lumia Windows Phone devices in the last quarter. Lumia Q3 volumes increased 19% quarter-on-quarter to 8.8 million units especially due to strong customer demand for the Lumia 520. For a comparison, Lumia volumes increased from 2.9 million in the third quarter 2012 to 8.8 million units this quarter. Nokia also saw slight increase in feature phone device sales. Mobile Phones Q3 volumes increased 4% quarter-on-quarter to 55.8 million units, demonstrating solid performance across the majority of our portfolio due to recently launched devices, particularly the Nokia 105, the Asha 501, and the Nokia 210.
Read Nokia’s financial statement on Devices and Services unit after the break. Download full report here.
Net Sales
Both year-on-year and sequentially, the increase in our Smart Devices net sales in the third quarter 2013 was due to higher volumes, partially offset by lower ASPs.
Volume
The year-on-year increase in our Smart Devices volumes in the third quarter 2013 was primarily due to higher Lumia volumes, partially offset by lower Symbian volumes. Symbian volumes decreased from 3.5 million units in the third quarter 2012 to approximately zero in the third quarter 2013. Our Lumia volumes increased from 2.9 million in the third quarter 2012 to 8.8 million in the third quarter 2013.
On a sequential basis, the increase in our Smart Devices volumes in the third quarter 2013 was primarily due to the Lumia 520.
Average Selling Price
The year-on-year decrease in our Smart Devices ASP in the third quarter 2013 was primarily due to lower recognition of deferred revenue related to services sold in combination with our devices and lower sales of accessories, partially offset by a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products and the net positive effect of foreign currency fluctuations.
Sequentially, the decrease in our Smart Devices ASP in the third quarter 2013 was primarily due to our pricing actions, lower recognition of deferred revenue on services sold in combination with our devices and the net negative effect of foreign currency fluctuations, partially offset by a positive mix shift towards the Lumia 1020 which started to ship in the third quarter 2013 and the Lumia 925 which started to ship in the second quarter 2013.
Gross Margin
The significant year-on-year increase in our Smart Devices gross margin in the third quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher gross margin than our Symbian products as well as inventory-related allowances. Specifically, regarding inventory-related allowances, in the third quarter 2013, Smart Devices gross margin was negatively affected by approximately EUR 20 million of net allowances related to excess component inventory and future purchase commitments. In the third quarter 2012, Smart Devices gross margin was negatively impacted by approximately EUR 120 million of net allowances related to excess component inventory, future purchase commitments and an inventory revaluation. In the third quarter 2013, the year-on-year increase in our Smart Devices gross margin was also due to lower fixed costs per unit because of higher sales volumes. The year-on-year increase in our Smart Devices gross margin was partially offset by higher warranty costs in the third quarter 2013 due to the reversal of previously recognized warranty costs in the third quarter 2012 related to our Symbian devices.
On a sequential basis, the decrease in our Smart Devices gross margin in the third quarter 2013 was primarily due to inventory-related allowances. Specifically, in the third quarter 2013, Smart Devices gross margin was negatively affected by approximately EUR 20 million of excess component inventory and future purchase commitments, whereas in the second quarter 2013 our Smart Devices gross margin benefited from the reversal of approximately EUR 20 million of previously recognized excess component inventory and future purchase commitments.
Increases or decreases to Smart Devices inventory-related allowances may be required in the future depending on several factors, including consumer demand and continued ramp-up, particularly related to our new Lumia products.
Both year-on-year and sequentially, the increase in our Smart Devices net sales in the third quarter 2013 was due to higher volumes, partially offset by lower ASPs.
Volume
The year-on-year increase in our Smart Devices volumes in the third quarter 2013 was primarily due to higher Lumia volumes, partially offset by lower Symbian volumes. Symbian volumes decreased from 3.5 million units in the third quarter 2012 to approximately zero in the third quarter 2013. Our Lumia volumes increased from 2.9 million in the third quarter 2012 to 8.8 million in the third quarter 2013.
On a sequential basis, the increase in our Smart Devices volumes in the third quarter 2013 was primarily due to the Lumia 520.
Average Selling Price
The year-on-year decrease in our Smart Devices ASP in the third quarter 2013 was primarily due to lower recognition of deferred revenue related to services sold in combination with our devices and lower sales of accessories, partially offset by a positive mix shift towards sales of our Lumia products which carry a higher ASP than our Symbian products and the net positive effect of foreign currency fluctuations.
Sequentially, the decrease in our Smart Devices ASP in the third quarter 2013 was primarily due to our pricing actions, lower recognition of deferred revenue on services sold in combination with our devices and the net negative effect of foreign currency fluctuations, partially offset by a positive mix shift towards the Lumia 1020 which started to ship in the third quarter 2013 and the Lumia 925 which started to ship in the second quarter 2013.
Gross Margin
The significant year-on-year increase in our Smart Devices gross margin in the third quarter 2013 was primarily due to a positive mix shift towards sales of our Lumia products which carry a higher gross margin than our Symbian products as well as inventory-related allowances. Specifically, regarding inventory-related allowances, in the third quarter 2013, Smart Devices gross margin was negatively affected by approximately EUR 20 million of net allowances related to excess component inventory and future purchase commitments. In the third quarter 2012, Smart Devices gross margin was negatively impacted by approximately EUR 120 million of net allowances related to excess component inventory, future purchase commitments and an inventory revaluation. In the third quarter 2013, the year-on-year increase in our Smart Devices gross margin was also due to lower fixed costs per unit because of higher sales volumes. The year-on-year increase in our Smart Devices gross margin was partially offset by higher warranty costs in the third quarter 2013 due to the reversal of previously recognized warranty costs in the third quarter 2012 related to our Symbian devices.
On a sequential basis, the decrease in our Smart Devices gross margin in the third quarter 2013 was primarily due to inventory-related allowances. Specifically, in the third quarter 2013, Smart Devices gross margin was negatively affected by approximately EUR 20 million of excess component inventory and future purchase commitments, whereas in the second quarter 2013 our Smart Devices gross margin benefited from the reversal of approximately EUR 20 million of previously recognized excess component inventory and future purchase commitments.
Increases or decreases to Smart Devices inventory-related allowances may be required in the future depending on several factors, including consumer demand and continued ramp-up, particularly related to our new Lumia products.
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