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Tuesday, October 29, 2013

As Microsoft Looks On, Nokia Reports a Rise in Smartphone Sales

BERLIN â€" Microsoft has yet to get its hands on Nokia's handset business, but the American technology giant got some good news Tuesday.

Nokia, the struggling Finnish telecommunications company, said it sold 8.8 million of its high-end Lumia smartphones in the third quarter of the year, a 19 percent increase from the previous quarter. Nokia also sold 55.8 million low-cost phones over the same period, a small quarterly rise.

The announcement will be music to the ears of Microsoft, whose proposed $7.2 billion takeover of Nokia's handset unit is expected to close early next year and is aimed at expanding Microsoft's hardware offerings into direct control over manufacturing cellphones.

After agreeing to buy Nokia's handset business in September, Microsoft is looking to ride a wave of new smartphones and tablets that the European firm has announced in recent weeks.

Those include the Lumia 1520, a Windows Phone that will come with a 6-inch display, and the Lumia 2520, Nokia's first-ever tablet that has similar characteristics to Microsoft's own tablet, the Surface 2.

Despite rising smartphone sales, Nokia still reported an overall operating loss from the handset business, which continues to struggle from low-cost competition from manufacturers using Google's Android operating system.

The company said that the division's operating loss stood at 86 million euros ($118 million) in the third quarter of the year, a significant improvement on the 672 million euro loss in the same period last year.

The improvement was because of the growing traction of Nokia's smartphones in Western markets, particularly in the United States, where sales jumped sixfold, to "214 million.

Increased revenue in costly smartphones, however, was offset by falling sales of Nokia's low-cost handsets. In China, for example, third-quarter revenue fell 23 percent, to "215 million, while sales in the wider Asian-Pacific region tumbled 21 percent, to "769 million, over the same period.

“Net sales decreased in all regions, except for North America,” Nokia said in a statement on Tuesday. The company's share price rose 5.8 percent in afternoon trading in Helsinki on Tuesday.