Don’t Miss Out on This Huge Rebound: Nokia Corporation (NOK)

Page 1 of 2

I’ve long been a Nokia Corporation (NYSE:NOK) bull, as seen in the numerous articles I’ve posted about Nokia and the Lumia 920, and I’m happy to tell all the longs that we were correct. Nokia’s stock has almost tripled off its low of $1.63 a share, now hitting $4.70 after it announced it had sold 4.4 million Lumia devices out of 6.6 million smartphones overall (even higher if you reclassify Asha phones as smartphones). That marked a 51% growth from Q3 when Nokia sold 2.9 million Lumia’s. It seems that Microsoft Corporation (NASDAQ:MSFT)’s foray into mobile has finally paid off, as has Nokia’s. Don’t forget that Lumia 920 phones will also start selling in China at a cost of 1 yuan, or as I like to put it “free.” Investors are now optimistic on Nokia, so the shorts will have to think twice before pushing the stock down.

China potential

China Mobile Ltd. (NYSE:CHL) is going to heavily subsidize the Lumia 920T phones, which is going to be huge for Nokia. If Chinese consumers sign up for a 2-year plan, then they can pretty much get the phone for free. Apple Inc. (NASDAQ:AAPL)’s iPhone isn’t subsidized and will have to compete at a hefty $740 price point. Keep in mind that China’s average wage for urban households at non-private companies was $6,717 in 2011. This means that most won’t want to spend such a large chunk of their income on a phone and plan and will want to opt for a cheaper alternative. China Mobile (NYSE:CHL), the largest telecom company in China, has 667.2 million mobile subscribers (as of March 2012) and 59.6 million 3G subscribers (March 2012). With China’s wages rising at a rapid rate each year (up 8.5% in 2011 when adjusted for inflation for non-private workers and up 12.3% for private workers); Nokia has a lot of potential to gain a foothold in a rapidly growing market. Right now China makes up 22% of global smartphone sales and the US makes up 16% (as of Q1 2012 according to Canalys), so this growth catalyst is one every investor should look at.

Budget smartphone growth

Nokia Corporation (ADR) (NYSE:NOK)Nokia is also seeing strong growth in its Asha lineup, and in its latest quarter it sold 9.3 million of them. This budget “smartphone” is growing in popularity in Latin America, India, and China. Sales were up 43% quarter over quarter, with 6.5 million sold in Q3. Nokia competes with low end Android systems from Google Inc (NASDAQ:GOOG) in emerging markets, and over the years has been getting hurt pretty hard. Android has been gobbling up market share in emerging markets, increasing its market share in Mexico to 37% from 19% a year earlier. In Brazil where Android phone prices have been slashed, Android’s market share has grown from 20% to 47% in a year. What enables Android to do this is price. The price on an iPhone is $986 to $1,480 in Brazil, $592 if subsidized. In comparison Android devices can be as cheap as $148, which is why Apple is selling its later models at a much lower price point and why it is rumored to be making one specifically for emerging markets.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!