Nokia (NOK) CEO Stephen Elop predicted that the company’s third quarter was going to be a difficult one, and he was right. The Finnish company that once defined the standard for mobile devices (and hopes to do so again) says it lost more than $750 million in the third quarter, and saw its cash reserves plummet by $2 billion. Nokia’s currently has $3.5 billion in the bank, and remains confident that it can stop the red ink as its Windows phones take off in developed markets and its feature phones continue to sell well in emerging markets.
Emerging markets are Nokia’s lifeblood right now, where its feature phones marry low prices with some of the functionality of smart devices, like social media and Internet access. While consumers and investors in the U.S. tend to focus on the smartphone market, an estimated 5 billion of the 6 billion active SIM cards in the world are being used in feature phones.
In the United States and Europe, Nokia’s Lumia line of Windows phones represent its hope for a turnaround. Today the company said it sold 2.9 million Lumia devices during the third quarter, a decrease from the previous quarter. Many customers who might buy a Windows phone are holding off and awaiting the release of Windows 8. Overall, Nokia said its North American mobile device sales volume fell was about half of what is was during the second quarter.
Nokia announced earlier this year that it would reduce its headcount by 10,000 in an effort to control costs. The company hopes to cut operating expenses by $3 billion this year.
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