Nokia shares plunge as comeback struggles

Nokia's CEO Stephen Elop is struggling to regain share of a smartphone market dominated by Apple and Samsung.

LONDON (CNNMoney)

The struggling Finnish smartphone maker reported a steep drop in first quarter sales as it continues lagging behind market leaders such as Samsung (SSNLF) and Apple (AAPL, Fortune 500).

Nokia (NOK)'s revenue plunged by 20% to 5.85 billion euros compared to the first quarter the previous year, and revenue was down by 27% compared to the fourth quarter of 2012.

The drop in sales was twice as big as analysts anticipated and the shares plunged nearly 10% in Europe.

Related: HTC's comeback hinges on fickle consumers

The company said it shipped 5.6 million Lumia handsets in the quarter -- a 27% increase compared to the last quarter of 2012. Nokia has been pinning its turnaround hopes on Lumia phones, which are powered by Microsoft (MSFT, Fortune 500)'s smartphone operating system.

But the jump in Lumia volumes couldn't hide the fact that its two largest business units -- Devices & Services and Nokia Siemens Networks - lost sales at an alarming rate.

Back in 2006, Nokia controlled half of the smartphone market, but that was before Apple released its game-changing iPhone in 2007. The struggling company traded above $40 per share in late 2007 but its shares are now worth little more than $3.

First Published: April 18, 2013: 7:15 AM ET

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