Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has completed the sale of its handset business to Microsoft Corporation (NASDAQ:MSFT). The two companies closed the $7.4 billion deal on April 25. Nokia’s handset unit has increased component orders from Asian suppliers. According to DigiTimes, Asian panel maker such as Chunghwa Picture Tubes (CPT), Japan Display, Innolux, and touch panel makers GIS and Wintek have received increased orders from Nokia.
Nokia is going aggressively after Chinese vendors
Supply chain sources said that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) aims to build a strong presence in Asian smartphone market by offering low-price devices. Chinese vendors will be the Finnish company’s biggest rivals. The company is also targeting mid-range and high-end markets as well. Japan Display will be supplying HD and full HD units, while other panel manufacturers will be responsible for WVGA and QHD units. Meanwhile, Chinese smartphone makers have also been looking for lowest-priced solutions to raise price competitiveness in the Asian market.
Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone OS supports Qualcomm, Inc. (NASDAQ:QCOM) processors, and provides 3G capabilities even on low-cost smartphones, which some low-end Android devices don’t offer. Microsoft is enhancing its relationship with app developers to help the Windows Phone ecosystem grow stronger. Global low-cost smartphone market is estimated to be worth more than $50 billion.
Nokia’s networking business faces component supply shortages
On the other hand, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s networks business is hit hard by component supply shortages. The company said during its first quarter earnings call that shortage of certain components hit the NSN’s first quarter results. The company said that the shortage issue is likely to persist in the current quarter as well. Nokia’s newly appointed CEO Rajeev Suri said the company is working aggressively with its supply chain partners to address the issue.
It’s not the first time the shortage of mobile broadband infrastructure components have affected the Finnish company. In 2010, such shortages hurt networking companies like Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) and others.
Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) shares gained 1.66% to $7.36 at 10:56 AM EDT on Monday.