Nokia reported a quarterly loss of €487m (£424m) as plunging mobile and smartphone sales resulted in the second loss-making quarter in the Finnish firm's entire 19-year history.
With a 34 per cent fall in smartphone sales, Nokia not only lost the world smartphone market share lead to ascendant Apple but also to Korean firm Samsung, knocking Nokia into third place.
The catastrophic loss would have been even worse if it was not for a one-time €430m (£417m) patent payment settlement from Apple.
Nokia chief Stephen Elop said the firm's troubles were greater than expected and that the firm's new strategy, namely that of adopting Microsoft's Windows Phone operating system, introduced an "ambiguity" as the firm transitioned away from internally developed software.
Unsurprisingly Elop was upbeat about the firm's prospects, saying: "I believe our actions to mitigate the impact of these challenges have started to have a positive impact on the underlying health of our business."
"Most importantly, we are making better-than-expected progress toward our strategic goals," he added.
Nokia also committed to releasing the first Windows-powered Nokia smartphone by the end of the year. The UK, France, Germany, Italy, Spain and the Netherlands are thought to be the first markets to see Nokia's new Windows phones.