Smartphone Wars Create Rare Buying Opportunities: Apple Inc. (AAPL), Corning Incorporated (GLW)

Nokia’s two decades in China has given the company an extensive sales force and distribution network. The challenge is to revive the brand’s presence, rebuilding its image since the brand slipped from the consumers’ awareness for lack of “star products,” according to Sandy Shen, a Gartner analyst.  Nokia’s deal with China Mobile improves the former’s chances for a comeback; however, it should be careful and be sure to meet the expectations of old customers who are looking for upgrades. Lin Sanmu, a long time Nokia user, said, “I got five years of use out of my last Nokia phone and that’s pretty good.  Nokia is good quality. Now, I’m looking to upgrade from a feature phone to a smartphone so I can use the Web.”

Corning, the glass-maker for phones, tablets and flat-panel televisions, saw its share price increase by 6.1% to $12.80 in early trading Jan. 31 after reporting sales and profit for the fourth quarter that exceeded analysts’ expectations. Profits reached $0.34 per share on buoyant sales, which rose 14% to $2.15 billion, topping analysts’ average projection of $0.32 per share and sales of $2.06 billion, according to Bloomberg data.

The popular Gorilla Glass, a damage-resistant screen material used in tablets and smartphones, reached over $1 billion in sales for the first time in 2012. Large televisions also contributed substantially to the company’s improve performance after a decline in the prices of (liquid-crystal-display) LCD. Chief Financial Officer Jim Flaws said, “It’s a strong sign that’s we’re beginning to come to the end of these LCD price declines, which we believe will be moderate all year.  We’re seeing the large-size televisions grow very nicely.”

Despite Corning’s improved performance, however, the company’s profit margin decreased to 42% for the last quarter from 44% a year earlier, amid competition and a barely moving economy. To be fair, this news is not in any way terrible enough to warrant its price-to-earnings multiple.

Investors should consider Corning and Apple as buy candidates.

The article Smartphone Wars Create Rare Buying Opportunities originally appeared on Fool.com and is written by Bill Edson.

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