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MS still pays more to Nokia than it receives in royalties from it. Nokia expects net sales growth in Q3 with new devices driving margin.

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CEO Elop and CFO Timo have discussed interesting tidbits in the Nokia’s earning call post Q2 results release. In answer to a question about MS payments they mentioned that Nokia is still a net receiver of overall two-way payments, MS to Nokia for supporting platform and Nokia to MS in from of royalties. So, Nokia is still slightly in plus for this year at least. Read more below,

Yes. Thanks, Mark. We are happy to talk about that a bit. So, we have said that overall during the lifetime of the contract, we expect to be a net receiver slightly, but that in the beginning of the contract period, we actually benefited for the ramp up of the Lumia and transition we needed to go through and are still going through. This year basically, we have still said that we are a slight positive or a slight receiver, but we are talking about small amount at this point in time, so they (Inaudible) each other out at the moment.

Also, Nokia expects net sales growth for devices in Q3, but declined to talk about volume guidance as they don’t have practical sales experience about device like Lumia 925 and Lumia 1020. But still they expect better margins in Q3 mainly driven by new devices.

So that, in some ways, explains why as our guidance for going forward, we gave a broader guidance of overall devices and services net sales growth expected going into Q3 from Q2 but we didn’t want to get too specific on volumes because so much of our revenue in Q3 will be based on new products.

As it relates to visibility, that is part of what we were trying to signal; is that given that the expectation for Q3 has a larger percentage than normal of new product launches it’s with less confidence that we can predict the volumes and so forth and so you saw us, if you just look historically we didn’t predict volumes in Q1, but we felt better about predicting volumes in Q2 because we had a more of a track record with the newer first generation Windows Phone 8 products.The 925, the 1020 products like that we don’t have any practical experience with it at this point or not at least to say what Q3 will look like, so that’s deliberately part of what we were trying to signal.

Wanna read more, click here.

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Nayan
Nayan has more than 10 years of experience of covering Technology and innovations. He is a big Nokia fan and Tech disruptions aficionado. He loves to review new cool gadgets and writing about Android, iOS, Gadgets and general Technology stuff. He has been associated with other well-known Tech sites WinCentral and GadgetOx since long. He currently sports a Lumia 950 XL and Nexus 5X. Other interests include listening to Nu-Metal Hits and Kick-Boxing. Write to him at Email: [email protected]
http://www.nokiapoweruser.com
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