Once upon a time, Finland-based Nokia was the world's mobile phone leader. It's Symbian (News - Alert) mobile operating system, designed for most of its feature phone handsets, was the most popular in the world. Of course, this was in an era technology archaeologists of the future might refer to as “BiP”: “before iPhone (News - Alert).”

Once Apple turned the wireless phone marketplace inside out with little warning, and Google came on board bringing up the rear (but now exceeding Apple (News - Alert)) with its Android operating system appearing on phones by Samsung, HTC and many others, and people began buying sexy smart phones en masse, Nokia was overwhelmed. It had nothing like that in its line-up, and the handsets Nokia peddled by the hundreds of millions all over the world for years started looking like country fair nags standing next to Thoroughbreds.

Nokia has, of course, tried to catch up. The company hired a new CEO, former Microsoft (News - Alert) man Stephen Elop, ditched its Symbian mobile OS in favor of Windows Phone 7 and is rowing its heart out to try and stay in the race. (Whether it's rowing cleverly is another story altogether.)

Still, one bright spot on Nokia's balance sheet remains its basic (non “smart”) handset line. Sales of the older style of phones (which some people apparently still want) generate much better operating profits than its smartphone line-up, the company said on Tuesday when unveiling regrouped past business results. (Though margins for the basic handsets are not growing: they are, in fact, shrinking against rivals.)

Smartphone operating profit margin, which the company called contribution margin in the statement, fell to 6.2 percent in the first quarter from 10.4 percent in the year-ago period. The margin on basic phones fell to 16.5 percent from 19.4, reported Reuters.

When compared with rivals, the numbers still overestimate unit margins because some costs for the businesses are split into a separate “others” accounting line.

“These numbers show how behind Nokia smartphone margins are compared with its rivals,” IDC analyst Francisco Jeronimo told Reuters (News - Alert).

For example, smartphone-focused HTC reported operating profit margin rising to 15.8 percent in the first quarter.

“Nokia has been tackling the decline of its smartphone market share by focusing on the mid-tier price points and price cuts, which has had a straight impact on margins and profits,” said Jeronimo.

The company's new line of smartphones based on Microsoft's Windows 7 OS will not be available until later this year.

Nokia's share price has halved since February -- when it unveiled the shift to Windows – on worries it will lose a lot of market share before the new phones reach stores and that it may never regain this.

The company will report more (probably bad) financial news on Thursday.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.