Nokia sold 12 million smartphones in Q1, including 2 million Lumia Phones

The success of Nokia's Windows Phone launches in the US and China is critical, according to Canalys

Nokia currently estimates the company will sell only 12 million smartphones during the first three months of 2012, as "multiple factors negatively" impact sales, the company said on Wednesday.

Nokia will sell a total of 71 million mobile phones during the first quarter, according to its expectations. That compares to 108.5 million during the same period last year.

The disappointing results illustrate that Nokia continues its transition toward depending on sales of smartphones based on Windows Phone, of which it sold more than 2 million during the first quarter, it said.

To change its fortunes, Nokia will increase investments in Windows Phone in order to bring more products to more consumers in more markets and it will lower the prices on some of its mobile phones, it said.

The company will also accelerate planned cost reductions and will "pursue additional significant structural actions if and when necessary."

As sales of Symbian-based smartphones are dropping faster than expected and the company faces increasing competition in emerging markets, it is becoming increasingly dependent on the ramp up of Windows Phone sales, including product launches in the U.S and China, according to analysts.

"The launches in the U.S and China are critically important because they are the number one and number two smartphone markets in the world," said Pete Cunningham, principal analyst at Canalys.

Nokia will start selling several Lumia smartphones to China this month, and the company started selling the Lumia 900 in North America on Sunday. The latter stumbled, as users were hobbled by a bug that in some cases could lead to a loss of data connectivity.

Nokia also needs to start shipping the Lumia 610 as soon as possible, according to Cunningham. At €189 (US$248) without subsidies it is Nokia's cheapest Windows Phone so far, and will begin shipping during the second quarter, according to Nokia. The device will help drive volumes, according to Cunningham.

On Wednesday, Nokia also launched an NFC-enabled version of the Lumia 610.

Nokia will provide full first quarter results and more details on April 19, it said.

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Mikael Ricknäs

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