Nokia lost its throne to Apple

Mobile phone maker Nokia Corp on Thursday posted a loss of 368 million ($523 million) in the second quarter and for the first time was overtaken by Apple's iPhone in smartphone shipments.

Nokia, which posted a profit of 227 million in the same period in 2010, said revenue fell 7% to 9.3 billion from 10 billion last year.

It shipped 88.5 million mobile devices in April through June, down from 111 million a year ago and 108.5 million in the previous quarter.

Its smartphone volumes fell to 16.7 million units, which means Nokia is no longer No. 1 in the smartphone sector. Apple Inc sold more than 20 million iPhones in the same quarter, lifting its net income to a stronger-than-expected $7.31 billion.

"The challenges we are facing during our strategic transformation manifested in a greater than expected way" during the quarter, CEO Stephen Elop said. "However, even within the quarter, 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."

Nokia's share was up 3% at 4.21 on the Helsinki Stock Exchange immediately after the report.

Nokia said it was accelerating its cost-cutting plan to exceed the previously targeted savings of 1 billion in 2013. The reductions would be achieved through cuts in staff and outsourced professionals, facility costs "and various improvements in efficiencies", the company said.

While that could improve the company's finances, Nokia needs to take quick action to develop new products or it will continue to lose ground to its rivals, said Neil Mawston of London-based Strategy Analytics . He expects Samsung to also surpass Nokia in smartphones when it releases its second-quarter earnings next week.

Nokia's global market share dropped below 30% earlier this year for the first time in over a decade.

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