Microsoft Is Losing At Least 12 Cents For Each Windows Phone Sold Worldwide

Nokia’s mobile phone woes continue, but now they are Microsoft’s woes, thanks to the company’s $7.2-billion acquisition of Nokia’s mobile phone business early last year. Microsoft recently filed a 10-Q with the Securities and Exchange Commission (SEC) that, notes Computerworld’s Gregg Keizer, suggests a loss of about 12 cents per phone. Is Microsoft planning a write-off of the Nokia acquisition?

Microsoft appears to be taking losses on its phones
Microsoft Lumia 640

“Given its recent performance, the Phone Hardware reporting unit is at an elevated risk of impairment,” the report states. “Declines in expected future cash flow, reduction in future unit volume growth rates, or an increase in the risk-adjusted discount rate used to estimate the fair value of the Phone Hardware reporting unit may result in a determination that an impairment adjustment is required, resulting in a potentially material charge to earnings.”

Microsoft has been working hard to find a solid customer base for its smartphones and has gotten the attention of many customers with its budget-friendly Lumia line. Microsoft hasn’t been using the Nokia label, however, despite having rights to it for several more years. Nokia itself has recently made some noises suggesting that it would like to get back into the mobile phone market when it regains the freedom to do so late next year.