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Nokia’s latest headache: It may only be able to produce 600,000 Lumia 920 phones a month

December 19th, 2012 at 2:35 PM
Nokia Lumia 920 Production

The handset production volume leaks from Sohu are not much more highly regarded than Digitimes rumors on Apple (AAPL) products. But sometimes Sohu does get good leads from Chinese factory sources. Today’s bombshell from China is the claim that Nokia (NOK) can only produce 20,000 units of models like the Lumia 920 and the Lumia 620 a day in its Chinese facilities. Nokia produces the 920 for North America in Mexico, but the production for European and Asian sales is believed to take place in China; North American sales of Lumia could be as low as 5% of global sales. In 3Q12, North America made up 1% of Nokia’s device revenue.

This would mean that the 920 is chugging along at a 600,000 monthly unit production rate, which seems rather low considering that the European estimates for Nokia’s fourth quarter Lumia volume have now moved decisively above 4 million units. The Lumia 920’s availability only really began improving around December 14 in Europe. In the United States, shipments to chains such as Best Buy (BBY) and Walmart are still meager, though AT&T’s (T) supply has improved decisively. Russian and French shipments of the 920 remain thin, though British and German availability seems to be okay for now.

In Helsinki, the 920 shortages are now widely believed to stem from spotty chip deliveries from Qualcomm (QCOM). Sohu still seems to be implying that the issue is simply Nokia’s inability to predict strong demand. This seems unlikely for a make-or-break product that launched just five weeks before Christmas. It is hard to believe Nokia would ever have deliberately planned for a mere 600,000-unit monthly production volume for its most important model of 2012.

Interestingly, the British retail site called Unlocked Mobiles has just put the Nokia 620 up for pre-orders, with a shipment target set for the end of January. The after-tax price of the 620 seems truly delicious at £175. This is £50 below the 8S, the rival budget Windows model from HTC (2498). But HTC managed to get its budget Windows device on sale in the second week of December. Nokia looks to be six weeks late, with the 620 landing during the dead zone of the European handset retail calendar. This does seem to imply that Nokia is wrestling with real production challenges, whether they stem from a chip provider or logistics planning.

First paragraph updated for clarity.




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