The stock price of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) surged as much as 11 percent to $4.12 and subsequently went down to $3.97 per share, still up by nearly 8 percent on Tuesday afternoon trading in New York.
A recent report from Liberum Capital indicated that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has consumer satisfaction in its favor and recommended a buy rating for the stock citing that the company’s Lumia smatphone models were gaining sales momentum.
Nokia Shares Surge on Report:
Industry observers opined that the rise in the stock value of Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) might be prompted by a report from Daniel Thomas of the Financial Times that Huawei Technologies Co. Ltd (SHE:0025020) is interested in acquiring the Finnish smartphone manufacturer. The Chinese telecommunications group believes that the acquisition of Nokia will pave the way for it to become the leading smartphone manufacturer worldwide.
Richard Yu, CEO of Consumer Business at Huawei Technologies Co Ltd (SHE:002502) said, “We are considering these sort of acquisitions, maybe the combination has some synergies, but it depends on the willingness of Nokia. We are open-minded.”
The Financial Times noted that the Chinese telecommunications group has no major acquisitions in the past. Some of the people close to the company stated that nothing is currently on the table regarding a possible acquisition. Yu’s comments demonstrate Huawei Technologies Co Ltd (SHE:002502)’s ambition to become a strong competitor against Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and Apple Inc. (NASDAQ:AAPL) in the global smartphone market.
Yu projected that smartphone manufacturers will merge and the smartphone market will eventually be composed of three or four companies. He also is of the opinion that the Windows Phone operating system integrated in some of the smartphones of Huawei Technologies Co Ltd (SHE:002502) and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is weak. A majority of the smartphones developed by the Chinese telecommunications group are now integrated with Google Inc (NASDAQ:GOOG)’s Android operating system.
“Whether Windows Phone [will be] successful is difficult to say – it has a very small market share. [Windows Phones] are weak but still require a licence fee. That’s not good. Android is free,” said Yu.
Huawei Technologies Co Ltd (SHE:002502) is currently the third largest smartphone manufacturer in terms of volume. According to Yu, the company aims to exceed its internal sales target of 55 million to 60 million smartphones this year.
Yu further emphasized that the company wants to lead and reduce the gap between its competitors in the industry. Its plan is to move towards selling only “smart” internet connected phones using its own brand name. Huawei Technologies Co. Ltd (SHE:0025020) is focusing its investments in next generation technology, and its objective is to develop a slimmer, lighter, and faster smartphone than the best-selling product of Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930).
The company unveiled the Ascend P6, one of the slimmest premium smartphone available in the market. The specifications of the Ascend P6 is similar to the latest models of the iPhone and Samsung Galaxy devices, but its price is cheaper.