Nokia – Long term bet for investor

23:51:00
Most of the analyst feels that Nokia is under pressure to deliver both on product and profitability end. I observed that many analyst writing down Nokia prospect and predicting that it would be an acquisition target. I feel the other way and with confidence can claim that their strategy to be one of the best product portfolios would be achieved in next 2 quarter. Most of the print media focussing on their effort to halt market share loss vs. competitors in the last 2 years. Here are some of the crude facts for the critic of Nokia strategy. The major geographies which may impact the total device market are US, India & BRIC countries.

India Status

In recently published report cyber media about Indian mobile device market dynamic and Nokia leadership in India clearly demonstrate that even during transition phase, Nokia managed to hold on their Number 1 position. It is interesting to observe that Indian market offer full opportunity for the feature phone where Nokia Asha is giving competitors sleepless night. On the Smartphone segment, Lumia 500 series with sub $200 range and offering smartphone differentiated feature set attracting lost Nokia loyalist into their fold again. The recent upgrade of Lumia series across price point and their potential availability in said geography is going to offer more muscle power to govern dynamics.

China Status

After losing market share to local player, Nokia rejigged their china based management team. In the last few months, Nokia successfully collaborated with China Mobile and Chinese retailers to offer value for money. The china mobile deal and customized Lumia 920T mass delivery is only going to help Nokia regain their lost ground in china. The additional bulk buying of Nokia devices by online Chinese retailers are offering Nokia an opportunity to predict the expected delivery and according ramp up their cost effective and efficient manufacturing processes. The China story is not reflected in their released result last quarter. At the same time, China is one of the biggest market for feature phone and Nokia offering from $20 to $300 range device for one of most active replacement cycle market is going to play in Nokia favour only.

US status

The biggest achievement of Nokia with their changed strategy is US market penetration and successful adoption of product line. Most of the service providers and retailers are offering Lumia product line. The recent launch of customized Lumia high end smartphone with Verizon would definitely bring cheer to all Nokia Investor. Last quarter, Nokia volume was impacted due to component issues and Nokia is known for seamlessly fixing up those issues. The recent glitch of iPhone integrated maps helped Nokia to establish their brand effectively in US. One should not be surprised, if Nokia captures more than 10% of US smartphone market in Next two quarter.

I also would like to point out that it took Motorola good three years to be formidable device player post sudden debacle in 2001 whereas Samsung became king of Smartphone after 7 years of heavy investment in the segment.

What I observed that Nokia restructuring and their head office sell out got more negative publicity compared to their innovative product line.

I also would like to request post reader to name one of the mobile device manufacture who are directly associated with an organization offering most of your work based software. Nokia was criticized for going other way and collaborated with Microsoft instead of adopting Android. Everyone focussed on financial part of it but rarely found any article where the benefits were mentioned for potential customers.

In my point of view, smart investor should focus on their patent portfolio, patent win over Blackberry and other companies, licensing agreement with QUALCOMM, Nokia Siemens Stake, Value associated with Navteq, Ovi Store and many other. I don’t believe that the current market price and Market Cap of $ 3.48 and $ 12.92 is anywhere near to reality. It pops up simple query from potential downfall of share price; the answer is simple- big player moved out from share due to dividend and restructuring cost.
My recommendation to potential long term investor would be to analyse it your own and invest for multi fold gain in next one year.


Disclaimer: Request potential investor to consult their financial advisor before investing. The above assessment is purely my view regarding Nokia potential

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Visionary Leader with 22 years of multi-functional experience - combine astute tactical, strategic, business, technology and industry skills in ICT domain at domestic and international level (Wired/Wireless/ networks /platforms/ connected device) .... More

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