Nokia Corporation (ADR) (NOK): Samsung Sees Something It Likes

Nokia Corporation (ADR) (NOK): Samsung Sees Something It Likes
Hermann / Pixabay

Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) may be a distant third in the smartphone race, but it still performs strongly in feature phone land. While some may see this as an indication that Nokia is living in the past, it may actually be that Nokia is taking a little bit of the past to create a new niche for itself: the smart feature phone.

Nokia Corporation (ADR) (NOK): Samsung Sees Something It Likes

There’s no doubt that there’s a battle for market share in this emerging market. Low-end devices do better in emerging markets, generally because those who live in these markets can’t afford expensive smartphones. But what if they could have a phone that’s less expensive than a smartphone and maybe has some, but not all of the features of a smartphone, but at a substantially lower price?

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This is exactly where Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is going with its Asha phone series. While much focus has been on the company’s Lumia handsets, which run on Windows 8, its competitors aren’t forgetting about the Asha series.

Nokia reported 9.3 million Asha phones sold globally during the last quarter, and in the next earnings report, much of the weight will fall on those phones. It’s simply too early to tell how the Lumia handsets are doing quite yet.

At least one competitor is sitting up and taking notice of Nokia’s Asha phones. Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) unveiled its Rex handset line earlier this year, and it’s already putting pressure on Nokia’s Asha handsets.

It’s important to note who came first here: Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s Asha phones have been out long before Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s Rex handsets. Both are aimed at a certain niche in the emerging phone market: that group of users who want some of the data features of a smartphone but are looking for a feature phone price.

When comparing the hybrid phones from both handset makers, it’s clear that while Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s Rex phones have better specs, Nokia’s Asha phones have stronger, more-developed features like music and games. Nokia’s next earnings report will be an important one for the struggling Finnish handset maker. Analysts will be looking hard at those Asha sales numbers to see how the line continues to stack up against any competitor who might want to get in on the smart feature phone action.

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