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With just about two months before the pending sale of Nokia Corp.’s device and services business to Microsoft Corp., the Finnish phone company has reported a US$841 million net loss for 2013.

Nokia reported fourth quarter sales of $4.75 billion down by 21 per cent year-on-year and said that revenue for its device and services business was $3.5 billion down 29 per cent year-on-year.

Geoff Blaber, vice president of research for Americas for CCS Insights said Nokia’s decreasing smart phone shipments will be one of the key issues Microsoft has to confront after the deal in closed, to ensure the survival of the Windows Phone OS. The takeover by Microsoft is expected to close sometime in March.

Nokia did not break out how many phones it sold, but reported that it shipped fewer handsets overall, year-on-year, while smart phone sales increased.

From the third quarter to the fourth quarter, however, Nokia sold less smart phones and more phones overall.

Considering that sales of Lumia, Nokia’s Windows Phone-based line, were increasing last year, the drop in smart phone sales is disappointing for Nokia and Microsoft, according to Francisco Jeronimo, research director for European mobile devices at IDC.

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