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Samsung and Apple have Nokia down but not out

By Emerging Money,  June 23, 2012, 12:00:15 PM EDT

Nokia Corporation ( NOK , quote ) has been losing the fight for market share against industry heavyweights Samsung ( SSNLF , quote ) and Apple ( AAPL , quote ), but it is counter-punching with three new models of its Asha portfolio of S40-based mobile phones.

The Finnish phone manufacturer will use these models to defend and expand its emerging market share.

Until recently dethroned by Samsung, Nokia sold more mobile phones than any other entity in the world. Samsung is surging in popularity, however, and Apple has called China its major growth area for the future.

Analysts put the value of Nokia's emerging market operations at about 40% of the company's worth. The new S40-based phones are intended by Nokia to increase that valuation with features such as a re-designed full-touch interface.

The new line is needed because the Lumia series has done little to help Nokia's market share or stock price. Since the Lumia 900 was introduced in early April, the stock price for Nokia has fallen about 40%, and analysts have downgraded the stock three times. The most recent analyst downgrade was a Sell rating issued by MKM Partners on May 30, 2012.

(Not all of the stock woes can be laid at Nokia's door. May market action also punished the shareholders of Samsung and Apple.)

Nokia is starting to rally however. Over the last two weeks of market action, the stock price is up. Part of the rise is attributed to reports from Reuters of a possible takeover bid from Samsung . This rumor has been dismissed by industry insiders though. The FNN video clip below describes the reaction to the rumor.

Nokia is now trading around $3 a share, with a  mean analyst target price over the next year of $4.32




The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.


This article appears in: Investing, International, Stocks

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