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
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive iPhone Apps

The 9 Most Expensive Designer Shoes in the World

The 10 Most Expensive Cigarette Brands

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

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!