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Nokia’s slow but steady steps along the road to recovery continued in the first quarter, amid growing demand for its top-end Lumia smartphones.

Sales of the Windows Phone-powered handsets hit 5.6 million during the first three months of the year. That represents a 27 per cent rise from the final quarter of 2012, with two-thirds made up by newer Windows Phone 8 smartphones.

Rising demand for Lumia phones was not enough, however, to arrest a decline in revenue from handset sales, which dropped by 30 per cent to 1.59 billion Euros.

More positively, losses were down to 339 million Euros (£290 million), compared with a loss of 1.57 billion Euros for the year-ago period.