Nokia has announced it lost $1bn in the second quarter of 2012.

While it sold four million Lumia smartphone devices, up from two million last quarter, it lost money overall because sales of its other phones fell quicker than the growth of its new lines.

Nokia has now sold around seven million Lumia devices, but only 600,000 in the United States last quarter.

Overall its sales and services revenue decreased by 5% quarter-on-quarter.

It sold 83.7 million phones, up from 82.7 million in the previous quarter.

Compared to 2011 its net sales were down 19% while operating losses grew from €287m to €826m.

Nokia added that it expects the third quarter of 2012 to also be tough, due to "product transitions". Sales of its Lumia phones are expected to dip ahead of the introduction of Windows Phone 8, because the new OS won't run on existing devices.

However Nokia added that its cash stocks actually rose by around $125m in the quarter, year-on-year, thanks mainly to licensing payments.

More to follow.

Stephen Elop, Nokia CEO, said:

"Nokia is taking action to manage through this transition period. While Q2 was a difficult quarter, Nokia employees are demonstrating their determination to strengthen our competitiveness, improve our operating model and carefully manage our financial resources.

We shipped four million Lumia Smartphones in Q2, and we plan to provide updates to current Lumia products over time, well beyond the launch of Windows Phone 8. We believe the Windows Phone 8 launch will be an important catalyst for Lumia. During the quarter, we demonstrated stability in our feature phone business, and enhanced our competitiveness with the introduction of our first full touch Asha devices. In Location & Commerce, our business with auto-industry customers continued to grow, and we made good progress establishing our location-based platform with businesses like Yahoo!, Flickr, and Bing. We continued to strengthen our patent portfolio and filed more patents in the first half of 2012 than any previous six month period since 2007. And, we are encouraged that Nokia Siemens Networks returned to underlying operating profitability through strong execution of its focused strategy.

We are executing with urgency on our restructuring program. We are disposing of non-core assets like Vertu. We are taking the necessary steps to restructure the operations of the company, which included the announcement of a new program on June 14. Faster than anticipated, we have already negotiated the closure of the Ulm, Germany R&D site, and the negotiations about the planned closure of our factory in Salo, Finland are proceeding in a collaborative spirit.

We held our net cash resources at a steady level after adjusting for the annual dividend payment to our shareholders. While Q3 will remain difficult, it is a critical priority to return our Devices & Services business to positive operating cash flow as quickly as possible."

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  • Nokia 1011 (1992)

    Named after 10 November, the date it launched, this was among the world's first GSM mobile phones. Oddly enough, you could receive text messages but not send them.

  • Nokia 2110 (1994)

    The 2110 featured a 99-number phonebook, and a two-way scrolling control which meant you could actually navigate them. It was also the first phone with the signature 'Nokia' ringtone. You know the one... It was based on Gran Vals, a guitar piece by the 19th century Spanish composer Francisco Tarrega. Over time it was also highly annoying.

  • Nokia 8110 (1996)

    The Nokia 8110 was the first slider phone and was featured in the Matrix, resulting in a generation of slick idiots pretending to be Neo when picking up calls from their mum.

  • Nokia 9000 Communicator (1996)

    Nokia claims that was the 'world's first smartphone'. That might be pushing it - but it certainly pushed the boundaries. It had a full QWERTY keyboard, a 24 MHz i386 CPU, could be used horizontally or vertically, and could send a variety of messages - including faxes.

  • Nokia 5110 (1998)

    The 5510 was one of the first phones with a replaceable cover - and also one of the first to feature Snake. Which, kids, was a game in the olden days which drove. Us. Mad.

  • Nokia 7650 (2002)

    The 7650 was promoted in conjunction with the film Minority Report, but was actually fairly futuristic for its time. Beyond its experimental looks, it came with Nokia's first full colour screen and a built-in camera. This phone made Nokia the largest manufacturer of digital cameras in the world, the company claims.

  • Nokia 7600 (2003)

    The notoriously awkward, and now notoriously awesome 7600 featured a teardrop design, and a fabulously difficult to use interface.

  • Nokia 1100 (2003)

    The 1100 is one of the best-selling consumer devices ever made - 250 million have been shipped worldwide, largely in the developing world, due to its sustainable design, cheap price and built-in flashlight and radio.

  • Nokia 7280 (2004)

    Alongside the 7600, the 7280 is one of the weirdest phones ever produced. It featured a screen that faded to a mirror when it was inactive and used a Navi-spinner in the place of a keypad.

  • Nokia N93

    Just look at it.

  • Nokia 8800 (2005)

    The 8800 was a self-consciously premium device which featured a brushed-metal body, fine-pitch glass and ball-bearings in the slider. You probably weren't able to afford one.

  • Nokia Lumia 800 (2011)

    The Lumia 800 and 900 are Nokia's flagship Windows Phone 7 devices. They've since shared a gold award from the Industrial Designers Society of America, and are widely seen as - in industrial design at least - among the most beautiful devices currently on sale.

  • Nokia Lumia 900 (2012)

    The Lumia 800 and 900 are Nokia's flagship Windows Phone 7 devices. They've since shared a gold award from the Industrial Designers Society of America, and are widely seen as - in industrial design at least - among the most beautiful devices currently on sale.

  • Nokia Asha 306 (2012)

    The Nokia Asha 306 brings a full-touch smartphone experience to emerging markets, and in the spiritual inheritor to the Nokia 1100.