HELSINKI (AP) -- Mobile phone maker Nokia Corp. on Thursday posted a fourth-quarter net loss of euro1.07 billion ($1.38 billion) as sales slumped 21 percent even as the company's first Windows smartphones hit markets in Europe and Asia.
The loss compares with a profit of euro745 million in the same period a year earlier.
Nokia said net revenue -- including both its mobile phones and its network divisions -- fell from euro12.6 billion in the fourth quarter of 2010 to euro10 billion, with smartphone sales plunging 23 percent.
Nokia has lost its once-dominant position in the global cell phone market, with Android phones and iPhones overtaking it in the growing smartphone segment.
The Finnish company is attempting a comeback with phones using Microsoft's Windows software, a struggle that Nokia CEO Stephen Elop characterized as a "war of ecosystems."
He said Nokia has sold "well over" 1 million such devices since the launch of the Lumia line in the fourth quarter, in line with company expectations.
Including other models, Nokia sold 19 million smartphones in the quarter. By comparison, Apple sold 37 million iPhones in the same period.
The Lumia 710 and Lumia 800 hit stores in Europe and Asia in November while T-Mobile started offering the 710 in the U.S. in January.
"From this beachhead of more than 1 million Lumia devices, you will see us push forward with the sales, marketing and successive product introductions necessary to be successful," Elop said. "We also plan to bring the Lumia series to additional markets including China and Latin America in the first half of 2012."
Nokia shares rose more than 5 percent to euro4.28 ($5.54) in afternoon trading in Helsinki.
Michael Schroeder, analyst at FIM bank in Helsinki, said markets had welcomed Elop's comments on sales of Lumia.
"It definitely alleviated concerns about a horror scenario, expected by some. Although a million is not a lot in the market, it was better than expected," Schroeder said.
The company said it would not provide annual targets for 2012 as it was in a "year of transition" but added that it expects operating margins in the first quarter of this year to be "about break-even, ranging either above or below by approximately 2 percentage points."
It repeated the target of cutting costs by more than euro1 billion by 2013.
Neil Mawston from Strategy Analytics in London said Nokia "was not out of the woods yet," but its quarterly result was in line with expectations.
"Nokia is not necessarily dead in the water. Profit margins were a bit higher than expected and Nokia has not lost its third position in smartphones although it is suffering in North America and western Europe," Mawston said.
Nokia proposed a dividend of euro0.20 per share for 2011 and said that chairman and former CEO Jorma Ollila will step down at the annual meeting in May. A nomination committee proposed board member Risto Siilasmaa as the new chairman.
Ritter reported from Stockholm.