Nokia earnings warning, is there a plan B?

Embattled Finnish phonemaker Nokia suffered a share price collapse following an announcement of a 40 per cent drop in revenue and €126m loss.

Nook chief Stephen Elop called the results "disappointing" and called the collapse in revenue the result of the firm’s business "in the midst of transition", presumably to the Windows Phone platform.

The company managed to flog two million Lumia handsets in the first quarter with Elop saying this was evidence of the Windows Phone devices having "established early momentum." It’s a small cry compared to the 71 million non-smart devices Nokia got out the door in the same period.

Sadly the firm’s flagship Lumia 900 launch in the US didn’t go exactly according to plan with users reporting that data connections were often lost on the AT&T network.

Gartner analyst Carolina Milanesi said that the mishap was "like they stalled their engine when everybody is looking at them at the start of their race." Nokia for their part was quick to offer a $100 rebate to make up for the gaff while they work on a fix.

The US launch mishap and the continued low average selling price as Nokia tries to curry favor with the all important mobile carriers hasn’t exactly helped the Lumia contribute to Nokia’s bottom line.

IHS Screen Digest analyst Ian Fogg said Nokia "stands on the brink of failing with its smartphone strategy" but said that the problem was not Nokia’s and rather OS-partner Microsoft.

"Nokia’s problem is that Microsoft appears to have stood still," said Fogg, adding " the gap in features between Windows Phone and Android or the iPhone has widened and not shrunk as Nokia needed it to."

Screen Digest is apparently of the belief that Nokia needs a Plan B incase demand for Windows Phone devices fails to materialise. Insinuating that Nokia should consider joining the Android masses, although they didn’t say as much.

Nokia shares fell by over 15% following the profit warning announcement.