Nokia’s not yet out of the red, but getting there.

Nokia’s Q2 earnings are out and they’re…okay, but not unexpected. The best news for Nokia is that they’ve managed to push out 7.4 million Lumias in the quarter. That’s a huge bump above their previous record high in Q1 of 5.6 million and also last years Q2 results of 4 million.

However, this bump can largely be attributed to the launch of the budget priced Lumia 520, which was recently noted to be the most popular phone running WinPhone. Although the U.S got the 521 variant on T-Mobile that currently sells for $150 off-contact, U.S sales actually dropped by 16% year over year. The popularity of this budget phone would also explain the drop of the average sale price of a Nokia smartphone from $250 to $206.

On a slightly more depressing note, Nokia reported losses of $151 million with its devices division taking $43.25 million of that. However, keep in mind that last year’s Q2 had Nokia reporting losses of over $1 billion. The fact is, Nokia’s Windows Phone 8 lineup is saving the company as devices like the Lumia 920 represent the significant advances in hardware over their Windows Phone 7 devices.

All in all, I expected muted results from Q2 since the only major device launches were budget smartphones. With Q3 carrying the weight of all of Nokia’s new high end hardware (Lumia 928 for Verizon, 925 for T-Mobile and some other worldwide carriers, and the impressive 41-megapixel Lumia 1020), I would expect similar if not slightly lower sales but much higher profits. Will Nokia be profitable next quarter? I don’t think so, but they are on their way.

Source: Nokia

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