Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has been blocked in by low-end and high-end competition, according to analysts at RBC Capital Markets. In a report issued to investors this week, they called the company’s situation “a sandwich…but not the yummy kind.”
RBC Capital Cuts Nokia Unit Forecasts
Analyst Mark Sue and his associate Ameet Prabhu said this week that they trimmed their unit forecasts for both smartphones and feature phones. They also said they remain “uninspired” by Nokia’s new product line, which is expected to be out in the fall.
In their view, Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) “appears to be a step behind the competition” in terms of its smartphones. They believe that the previous excitement surrounding the Lumia line has been replaced by higher than normal return rates. In addition, they see that low-cost Android smartphones are speeding up the decline in Nokia’s feature phone business.
Thus, they trimmed their full-year smartphone estimates from 32 million to 30 million, which is the low end of Wall Street’s estimates. They also trimmed their feature phone estimates from 196 million to 218 million and adjusted their calendar year estimated losses per share from .15 euros to .19 euros.
Nokia’s Quarterly Report May Miss Estimates
Sue said there’s a risk that Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) will miss its second quarter estimates. He said the company might even preannounce negative second quarter results in the next several weeks.
The analysts said feedback on the Lumia 925 and 928 handsets remains mixed, and they believe both handsets to be “compromise devices.” They said on a spec-by-spec basis, the handsets are behind more popular handsets like the Galaxy S4 and the HTC One and that carrier support will continue falling for Nokia.
At this point Microsoft Corporation (NASDAQ:MSFT)’s mobile market share is just 3.5 percent, compared to Android’s commanding 75 percent. Apple Inc. (NASDAQ:AAPL)’s iOS has an 18 percent market share, while Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s BlackBerry platform is battling Microsoft at 3.5 percent for the third position.