Nokia, posting its sixth-straight loss since adopting  Microsoft’s (MSFT)  Windows software, has projected another “transition” quarter as it revamps its handset line-up to challenge Apple’s (AAPL) iPhone. The third-quarter net loss widened to $1.27 billion from $875 million a year earlier, while Nokia said the fourth quarter will be “challenging” as it brings out new models.

Nokia has accumulated more than $5 billion in losses since management started their bet in early 2011 on handsets using Windows. To reduce costs, Nokia has cut more than 20,000 jobs and closed production and research sites as its latest devices have failed to stop customer defections to Apple’s iPhone and devices running Google’s (GOOG) Android software.

It is now pinning its hopes on new Lumia 820 and 920 models which run on Microsoft’s latest Windows 8 software and which are due to hit stores in November. Analysts noted, however, that the hype around Christmas gifts this year will be more around tablets than phones with Apple’s new mini iPad expected to be launched next week and new offerings from several companies including Amazon (AMZN) and Microsoft.

Nokia (NOK : NYSE : US$2.80), Net Change: -0.14, % Change: -4.76%, Volume: 130,797,129