Nokia falls to a loss as Apple claims lead in smartphones

Nokia slipped into the red over the second quarter as it lost ground to Apple, the Californian group which became the world's biggest smartphone producer by volume in the three months to June.

The Finnish group, the first mover in the fast growing market with its Communicator line in the Nineties, slumped to a €368m (£324m) net loss, its first since 2009, as shipments of its smartphones fell 34 per cent to 16.7 million compared to a year ago. Apple, in contrast, shipped more than 20 million of its iPhones over the three-month period, overtaking its European peer for the first time.

The Californian group's success underscored the challenge faced by Nokia, which has struggled to compete with rival smartphones from Apple and from Blackberry-maker Research in Motion. Nokia's chief executive, Stephen Elop, who was brought in to turn around the company last year, said the challenges faced by the business as it attempted to regain the initiative were "manifested in a greater than expected way" in the quarter.

Earlier this year, Mr Elop unveiled plans to slash 4,000 jobs and transfer another 3,000 to Accenture as part of a deal under which the consulting firm will take over the running of its Symbian operating system. The details came on the heels of a deal to develop new smartphones with Microsoft, Mr Elop's former employer.

Nokia said yesterday it was making progress on both fronts. "We are making better than expected progress toward our strategic goals," Mr Elop said, adding: "In smart devices, those who already have viewed our early Windows Phone work are very optimistic about the devices Nokia will bring to market and about the long-term opportunities."