Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Is Apple Inc. (AAPL) Seriously Comparable To BlackBerry or Nokia?

Apple Inc. (NASDAQ:AAPL)The tech world is constantly evolving and corporations can rise and fall in a few short quarters. With a long-dated option (LEAPS) and a little bit of clairvoyance, an investor could make a fortune. It is easy to dream of finding that one special company that will add a couple of zeros to your portfolio. The reality is that betting on the sudden reversal of a company is full of unknowns. There are a number of interesting turnaround plays in the mobile sphere, but for now it is safer to stick with a well-known company like Apple Inc. (NASDAQ:AAPL).


AAPL Total Return Price data by YCharts

Attempts at Corporate Revival

With the smartphone revolution, Nokia Corporation (ADR) (NYSE:NOK) fell from grace. Revenue and profits evaporated and the company’s stock plummeted. The Finnish government has stated that it won’t bail out the company. Now Nokia Corporation (ADR) (NYSE:NOK) is working hard to breathe new life into the firm.

Recent U.S. market share data isn’t encouraging; Nokia doesn’t even appear in the top five manufacturers. Thankfully, its position in emerging markets is better. A recent survey in Brazil, Saudi Arabia, India and Nigeria showed that around 20% of consumers would prefer to purchase a Nokia or an Apple Inc. (NASDAQ:AAPL) device. The company recently released their Lumia 521 for income-constrained consumers. Its low price of $129 with Windows Phone 8 has helped it to sell out across many American Wal-Marts. Slowly but surely, Nokia’s Lumia phones are bringing the company back from the dead.

Even with these encouraging developments, Nokia Corporation (ADR) (NYSE:NOK) has a difficult path ahead of it. The company has a higher debt load than many of its competitors with a total debt to equity ratio of 0.73. Even though Nokia posted negative income from continued operations in 2012 and 2011, it is trading above its book value at a price to book ratio of 1.33. By 2014 it looks like Nokia could make earnings per share (EPS) of only $0.17. Until profit margins are consistently healthier or the company trades closer to book value, Nokia is a comparably risky investment.

Research In Motion Ltd (NASDAQ:BBRY) is a Canadian firm that made its money from fat corporate and government contracts. With more workers bringing their own devices to work and the Apple Inc. (NASDAQ:AAPL)’s focus on the corporate sphere, BlackBerry is facing intense competition. For situations where a very high degree of privacy is required, BlackBerry still has an advantage. A number of its devices were recently approved for the Department of Defense’s networks.

In the consumer sector, Research In Motion Ltd (NASDAQ:BBRY) still faces major challenges. In a recent emerging markets survey only 10% of consumers said that disregarding price, they would prefer to purchase a Research In Motion Ltd (NASDAQ:BBRY). The company can still carve out a niche for itself, but investors have to realize that there is a minuscule chance it will ever reach the size or power of Apple Inc. (NASDAQ:AAPL). BlackBerry’s strengths are in high security situations for governments and corporations.

On the bright side, the company has no debt and has made $108 million in normalized operating income over the last two quarters. If investors and management are willing to accept the company as a niche player, then its current price to book ratio of 0.71 and gross margin of 41.9% paint it as an interesting company to watch.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.