Nokia Corporation (ADR) (NOK): It’s Time to Stop Worrying

Yet I believe that later this year, if Nokia Corporation (ADR) (NYSE:NOK)’s Lumia numbers improve, then its lower-end market will become increasingly irrelevant. Stronger brand recognition of Lumia devices will give Nokia more flexibility to offer a wider variety of branded higher-end and lower-end models, just as Sony did with the Xperia series and Samsung did with its Galaxy brand.

Nokia Siemens Networks

Although Nokia may constantly look like its being pounded against the ropes by its sleeker, sexier competitors, in reality the company is a survivor. Many Nokia investors often overlook the fact that Nokia still has an infrastructure joint venture – Nokia Siemens Networks – which is the world’s fourth largest telecom equipment manufacturer. This business, which Nokia owns more than half of, has benefited from the rising demand for telecom equipment to expand 3G, 4G LTE and broadband networks.

While NSN used to only generate sales that were roughly half of Nokia’s handsets segment, today they are relatively equal. During the first quarter, NSN posted a small profit of $4 million on sales of $3.7 billion, compared to $3.8 billion in handset and device sales. In addition, NSN was Nokia’s only business segment to post a profit or positive margins.

The Foolish Bottom Line

Even though I have stated before that I believe Nokia has more to gain if it starts producing Android handsets, I believe that Stephen Elop’s strategy of following Microsoft is a viable alternative. Windows Phones, which Nokia devices account for 80% of, will never take out Android or iOS, but they can hold on to a niche market and grow it.

Although smartphone users who aren’t followers of Android or iOS will be faced with a choice between Windows Phones and BlackBerry devices, I believe that there is room for both in the market, as they only indirectly compete with each other.

Nokia is a turnaround story in process, and these efforts take time. I believe that Elop came in just in the nick of time to save the company from completely collapsing, and Nokia now at least has one line of smartphones that is slowly growing. Given enough time, Nokia could return as a major name in the industry it helped create.

The article It’s Time to Stop Worrying About Nokia originally appeared on Fool.com.

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