Revenue at Nokia's handset business slumped 32 percent to 2.89 billion euros.
Nokia sold a total of 61.9 million mobile phones during the three months, of which 6.1 million were smartphones. Sales of the flagship Lumias running Microsoft's Windows software rose to 5.6 million units from 4.4 million in the fourth quarter as Nokia added versions.
"At the highest level, we are pleased that Nokia Group achieved underlying operating profitability for the third quarter in a row. While operating in a highly competitive environment, Nokia is executing our strategy with urgency and managing our costs very well," said Stephen Elop, Nokia CEO. "We have areas where we are making progress, and areas where we are further increasing the focus. For example, people are responding positively to the Lumia portfolio, and our volumes are increasing quarter over quarter. Nokia Siemens Networks delivered another strong quarter and contributed to an overall improvement in Nokia Group's cash position. On the other hand, our Mobile Phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges," he added.
Phablet in the pipeline?
In related news, Nokia is rumored to ship a phablet in order to compete with other devices and to suppliment a relatively slow growth in Lumia sales, the Financial Times reported.
The device is suggested to be similar in size to the Samsung Galaxy Note, but with a higher specification, and will also run Windows Phone as its operating system, the report added.
The report mentions that the first phone with Pureview imaging technology would be launched in July, one with a 40-megapixel camera and flash.