Nokia Corporation (ADR) (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) is much better positioned now than it was a year ago, which means we could see even more headway by the end of this year. Of course we’re still a far cry from a full turnaround, but with a diverse portfolio of handsets available, the struggling handset maker is starting to make some headway toward a recovery.
A Nokia handset for anyone
One of the reasons Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) likely became a powerhouse in the handset world is diversity. It offers a variety of handsets at different price points with different features, and this is exactly the strategy Nokia is adopting. The only think that might make some consumers think twice about switching is the Windows Phone operating system, but the company’s latest earnings report shows that this is changing.
In his 2021 year-end letter, Baupost's Seth Klarman looked at the year in review and how COVID-19 swept through every part of our lives. He blamed much of the ills of the pandemic on those who choose not to get vaccinated while also expressing a dislike for the social division COVID-19 has caused. Q4 2021 Read More
Nokia shifts away from feature phones
What’s especially interesting in Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V)’s two earnings report are the concerns analysts and investors have had about shrinking feature phone sales. After all, feature phone sales were the company’s bread and butter—in the past, when feature phones were popular. Most bears fail to take note of just how quickly the Windows Phones are taking off. Lumia sales rose 32 percent quarter over quarter to 7.4 million units in the June quarter. Also the feature phone market as a whole is shrinking as consumers look toward low-end smartphones instead. Nokia’s feature phone sales fell 4 percent quarter over quarter.
Nokia’s Asha line refresh just might be what the doctor ordered. Nokia said in its most recent earnings report that feature phones were picking up steam toward the end of the quarter, so we won’t really know the full effects of the refresh until the next quarter. However, the new Asha phones could be considered to be low-end smartphones because they’re right on the bleeding edge in terms of features.
Nokia starting to get the support of carriers
Another barrier Nokia Corporation (NYSE:NOK) (BIT:NOK1V) (HEL:NOK1V) has had to deal with is getting the support of carriers, and this is also changing. Telefonica S.A. (NYSE:TEF) (MCE:TEF) announced a partnership with Microsoft Corporation (NASDAQ:MSFT) for greater distribution of the Nokia Windows Phone line.
Other carriers which have shown renewed interest in working with Nokia Corporation (NYSE:NOK) include Vodaphone, T-Mobile, China Mobile and China Unicom. As emerging markets become a source of growth for smartphone makers, deals with China Mobile—which Apple Inc. (NASDAQ:AAPL) has yet to pull off—and China Unicom will become increasingly important.