Nokia has seen record losses of €1.2bn (£1bn) due to poor sales of its smart phones.

The Finnish brand reported a 21 per cent decline in all sales, compared with the previous year to £8.36 billion in the last quarter of 2011.

Handset sales decreased by 29 per cent to just over £5bn. Smart device revenue in particular saw a drop of 38 per cent to £2.5bn, despite promising sales figures of its Lumia smart phone, which sold more than a million during the quarter.

Despite the encouraging sales of the Windows-based smart phone, released in October last year, the company says that 2012 “would continue to be a year of transition” and so would not give any sales forecasts.

There are approximately 675m active owners of Nokia S40 phones in the world, selling 12 phones in the S40 range every second. A spokesperson for Nokia said: “Overall, we are pleased with the performance of our business.”