Nokia provided a preview of its fourth-quarter earnings Thursday, and the news is better than expected. The company managed to both sell more phones and reduce expenses in what looks to be the first sign of a possible turnaround for the struggling smartphone maker.

Nokia sold a total of 86.3 million mobile devices during the fourth quarter. Of that total, 15.9 million were smartphones. The company sold 4.4 million Lumia smartphones, all of which run Microsoft's Windows Phone OS. Consumers are still clamoring for Nokia's out-going Symbian platform, which managed to sell 2.2 million phones. Nokia is also calling its Asha-branded handsets smartphones, and it sold 9.3 million of those. The Asha handsets run an updated version of Nokias Series 40 platform, which is based on Java.

The real story here, of course, is the increase in Nokia's Lumia sales. A handful of Lumia devices reached the U.S. during the fourth quarter, including the flagship Lumia 920, which is sold by AT&T, and variants of the Lumia 820, which are sold by AT&T, T-Mobile and Verizon Wireless. The 920 costs only $99 and the 820, 822 and 810 have been priced at about $49. Nokia sells other models in other markets, as well.

Nokia is far from out of the woods, though. It has seen three consecutive quarterly losses, with more than $6 billion in cash evaporating as the company transitions to Windows Phone.

At CES this week, a Verizon Wireless representative mentioned to me that the HTC 8X, which also runs Windows Phone, is selling well at the carrier. In fact, she had chosen it for her personal device.

Nokia's success and the solid sales of the 8X suggest that Windows Phone might finally be catching on. Microsoft corroborated this a bit.

Greg Sullivan, senior marketing manager at Microsoft, had plenty of good things to say about Windows Phone in an interview with Computerworld. "The sales trends are there for Windows Phone," Sullivan said. "They are going in the right directly absolutely and strongly." Sullivan noted that WP8 handsets are "selling like hotcakes" in China. In fact, both Sullivan and Microsoft CEO Steve Ballmer claim that sales of Windows Phone devices during the last week of 2012 were five times the level of sales seen during the last week of 2011.

This is all good news for Microsoft, which has long struggled to remain relevant in the smartphone space.

Microsoft's Windows strategy really began to come together in October and November, as sales of Windows 8 PCs, Windows Surface tablets and Windows Phone 8 devices all kicked off. Microsoft has a good ecosystem in place and can be the third horse in the smartphone platform race.

"With Windows Phone 8, we're in this for the long haul," Sullivan said. "We used to think about Windows as software on a PC, but it's also on the server and in the cloud and in Skydrive and other services, even Xbox. Windows is not only Windows and Windows Phone. It's across all parts of Microsoft."

Attend Online Marketing Summit San Diego, Feb. 11-13, and gather the insights and strategies you need to make the right online marketing choices to deliver the most value for your business. OMS San Diego offers three days of inspiration, connections, and practical learning. Register by Jan. 11 with code WETW01 and save up to $600 on All Access or Conference passes.

Federal agencies must eliminate 800 data centers over the next five years. Find how they plan to do it in the new all-digital issue of InformationWeek Government. Download it now (registration required).