Nokia has lost a huge amount of market share since the iPhone launched four years ago, and it’s time to do some serious damage control. The company had its earnings call for the second quarter, where it reported a serious decline across just about every category aside from Navteq and infrastructure business JV Nokia Siemens Networks.

The company reported an 11 percent decline in sales to €9.275 billion quarter-over-quarter, and its smart devices business took the biggest hit–€2.368 billion, a 33 percent decline from €3.503 billion a year ago.

Some more numbers:

“Nokia today reported an operating loss of €487 million for the quarter, a decline of €782 million from the same quarter a year ago, when it made an operating profit of €295 million.”

The company’s cash position from operating activities has also taken a nosedive. Last year the company had nearly €1 billion in net cash from operations; this year that figure is down to a debt of €176 million.”

These results are definitely not good, and Nokia really needs a significant push to be able to recover on the longer-run–“it’s time to jump off a burning platform,” said CEO Stephan Elop in a thought-out memo to staffers. The company hopes this push will come in the form of its $2 billion partnership with Microsoft to produce low-end devices running on Windows Phone 7.

The first one will be launched this year, Elop confirmed in today’s earnings call. And, it will probably be a more advanced variation of Sea Ray, a N9-based device that was leaked by a Nokia employee.

It’s better late than never, but Sea Ray needs to be big. Android is biting away huge chunks of Nokia’s share of the European market, and, Nokia’s decline in just about every market is actually boosting RIM. Users in emerging markets are switching from older low-end Nokia phone to Blackberry devices, while not expecting the latter ones to offer a PC-like experience.