Nokia still struggling in the smart-phone act
Apple struggles to provide LCDs for iPhone 4G’s advance orders. Nokia shares plunge 9% on lower devices and services outlook. The comparison board between Nokia and Apple has been like this for more than an year now. And from the looks, the story doesn’t seem to be getting better for Nokia and the story for Apple will possibly get better. Quite a difference.
Investors punished Nokia, sending its shares down 9 percent to 7.22 euros in Helsinki yesterday, the lowest level since March 9, 2009. The stock drop put the market value of Nokia at 27 billion euros ($33.3 billion), below the $34.4 billion of rival Research In Motion Ltd. and Apple’s $240 billion. The full-year adjusted operating margin in handsets could come in below the 11 to 13 percent range forecast earlier, mainly because of its weakness in high-end smartphones
To provide a summary: “The smartphone revolution has started and Nokia is not there,” said Helena Nordman-Knutson, a Stockholm-based analyst at Oehman. Can’t agree more. The lowered outlook is “an implicit statement that the Symbian user experience won’t be fixed this year and MeeGo won’t arrive in time to make a difference to 2010 either. The outlook cut also firms up the thought that Nokia is itself not sure that its 2nd half portfolio will be strong enough to compete in the smartphone space. While Nokia has held on to the 41% smartphone market share, H2 may see it making losses on this count which it may not be able to make good in some time to come.2010 doesn’t look like to be the year in which Nokia’s problems get fixed and investors are running out of patience and will want to hold someone accountable. The latest movements/re-organisation around the company provides very little succor especially in light of the fact that Nokia has had 3-4 such re-orgs in the last 3 years.
Bottomline: With the Apple 4G already a bestseller, with the phone still in a 2 month launch horizon and an impressive array of Android devices, the smart phone show will be dominated by HTCs, Motos and Apples of the world. Nokia hardly has anything exciting at this point to offer (The N97, N900 have disapointed and i am discounting the N8!). Expect Nokia to loose 5-6% market share points over the next 3 quarters.