Nokia Corporation (NYSE:NOK) announced its lackluster results, as its new found Windows 8 platform failed to gain any traction in a market well dominated by Apple Inc. (NASDAQ:AAPL)’s iOS, and Google Inc (NASDAQ:GOOG)’s Android O.S. The smartphones industry is slowly becoming a nightmare for the Finnish based mobile phone maker as competition intensifies and Nokia Corporation (NYSE:NOK) cannot promise any hope in the near term future. Capital Securities analysts are of the opinion that the fallen giant will continue to struggle through Q4.

Nokia

We recently featured an article highlighting Nomura Equity Research opinion on Nokia Corporation (NYSE:NOK)’s position in the smartphones industry, which was rather adverse, stating that the company’s immediate future is outlined in its feature phones, with an emphasis in Asha phones, as compared to Lumia Phones. This prediction was well exhibited in Nokia’s Q3 results, which posted a decline of 38% in smartphone sales, to 6.3 million units, qoq, as compared to a 4% rise in the feature phones sales to 76.6 million units.

The company’s Q3 revenues stood at EUR 7.24 billion, a decline of 4% qoq, and a 19% plunge yoy. Operating profits were EUR 78 million, a significant increase to the 1.1% margin, as compared to a Q2 operating loss margin of 4.3%. The company’s handset business generated EUR 3.563 billion in sales, with the feature phones accounting for EUR 2.366 billion, while the smartphones unit generated EUR 976 million. The unit recorded an operating loss of EUR 263 million, with the gross margin rising 0.4 percentage points to 18.5%, from Q2.

However, this rate could have been higher, had the smartphones segment not dropped further by 3.5%, as compared to a 21.7% rise in feature phones GM. Nonetheless, overall operating margin from the handset segment was up 1.7 percentage points, showing a loss of 7.4%, as compared to a 9.1% loss registered in Q2. The company shipped 82.9 million units, with  2.9 million representing Lumia phone sales units.

The analysts said, “overall speaking, Nokia’s 3Q12 results were lackluster, mainly due to fierce competition worldwide,” and cited a decline in Symbian phone sales amid competitions from Android and iOS phones, compounded by a slowdown in the transition from Windows Phone 7 to 8 for the Lumia phones. Subsequently the company continued to competitively lag behind in China and Europe in its key business segments. Meanwhile, the company is still continuing with its restructuring process that results in near term expenses, with the benefits deferred to the future.

Nokia’s Lumia phones 820 and 920 are expected to hit stores in November, with a further rollout scheduled for the C1Q13, which means, there is no expectation for significant improvement qoq in Q4. The analysts note that Nokia Corporation (NYSE:NOK) will face product transition challenges, intensified competition across the globe, and macroeconomic quandary of decline in demand, amid economic slowdown. The analysts said, “we thus forecast the revenue to remain lackluster in 4Q12 with an operating margin of -6%”.

At the time of this writing, Nokia Corporation (NYSE:NOK) stock was trading at $2.68 per share, down $0.13, or a 4.63% decline from yesterday’s close.

Disclosure: I do not hold any position in the stocks mentioned and do not plan to do so within the next 72 hours.