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Android now eating Nokia's feature phone business: can it get any worse?

The over-fair treatment may be a testament to the store of good will everyone seems to have for Nokia, but there's no disguising one over-riding fact: Android - having been the lead Nokia smartphone killer - is now coming after Nokia's feature-phone business as well... the Nokia slide continues.

One analyst party line used to be that whatever happened in the smartphone market was one thing; Nokia's real strength was in feature phones and telco distribution. There it was second to none.

Turns out that's no longer the case either. This quarter Nokia sold only 62 million non-smartphones, 25 per cent down on the same quarter last year.

There IS one of those tiny shining nuggets of good news though: Lumia sales (Nokia's Windows Phone) are up by 27 per cent, but that rise is only impressive because the base line is so low. A 27 per cent increase only brings quarterly Lumia sales up to 5.6 million units, a fraction of the feature phone unit losses for the same quarter.

The fact is, at this stage of its life, if Lumia was going to be a big global hit it would likely be well into a steep sales climb by now... it just isn't.

On the financials it wasn't pretty either. Nokia is continuing to see its revenues shrink: according to Bloomberg first quarter revenues were €5.9 billion against analysts expectations of €6.5 billion. Again the tiny nugget - Nokia has once again managed to pull back its losses somewhat, beating expectations of a €434 million loss by turning in a €272 million loss instead.

In summary: Nokia is not losing as much money as it might as both revenues and unit sales continue to spiral down. That doesn't sound like a turning tide to me and it didn't set hearts racing on the stock market either. Nokia shares dropped by 11 per cent in post report trading, according to Yankee Group Senior Analyst Boris Metodiev, who summed up the situation thus:

"The biggest chunk of Nokia’s revenues still comes from basic and feature phones. The problem is that such type of phones are seeing an increasing competition from low-end Android-based phones that currently can be found for as little as US$50, which contributes to Nokia’s drop in overall handset shipments.”

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