Demand Up for Nokia Devices

Just after the completion of Nokia World 2010, Nokia Corp.(NOK), the world’s largest mobile phone manufacturer, witnessed the highest ever demand through online pre-orders for the N8, which is supposed to be priced at 370 euros. N8 is based on upgraded Symbian 3 software and is ready to be shipped in December 2010. It has a multi touchscreen facility.

Symbian 3 OS is considerably faster, easier to use, more efficient and developer-friendly. Despite new competition, Symbian technology is fast gaining more traction over the Android technology provided by Google Inc. (GOOG).

In the second quarter 2010, Nokia shipped a total 111.1 million mobile handsets, up 8% year over year and up 3% sequentially. In the same quarter, the company shipped 24.0 million smartphones, up 42% year over year and 12% sequentially. Nokia’s global market share in overall mobile handset market was 33% in the second quarter 2010, compared with 35% in the year-ago quarter and 33% in the previous quarter. In the smartphone market, Nokia’s global market share was 41% in the reported quarter, flat both year over year and sequentially.

Nokia has been struggling for a long time to keep pace with rivals in the high-end, high-margin smartphone market. It has also been slow in launching premium devices to match the rival products such as Apple Inc.’s (AAPL) iPhone and new Android-based phones like Samsung’s Galaxy S, HTC’s Evo 4G and Motorola Inc.’s (MOT) Droid phones.

With the launch of the Symbian 3 based smartphones such as N8, E7, C7 and C6, we believe Nokia will recover its losses and once again rule the handset market. Nokia is also planning to use Intel Corp.’s (INTC) Meego, the open-sourced mobile operating system in its next range of smartphones.

Last week, Nokia announced the appointment of Stephen Elop, who heads Microsoft Corp.’s (MSFT) business division, in place of chief executive Olli-Pekka Kallasvuo. Mr. Elop will be of great help to Nokia in competing with Apple.

We maintain our long-term Neutral recommendation for Nokia. Currently, it is a Zacks #3 Rank (Hold) stock.

NOKIA CP-ADR A (NOK): Free Stock Analysis Report

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