Forbes: Nokia on the Road to Recovery?

You might have read this interesting post on Friday at Forbes. It talks about the beginnings of the Nokia recovery.

http://www.forbes.com/sites/ericsavitz/2012/03/30/nokia-the-recovery-begins-one-analyst-turns-bullish/

Now we’re all instantly defensive the moment we hear anything mentioned by ‘analysts’ that’s regardless of whether it’s positive or negative, we can’t place too much trust either way. Being Nokia fans and eternal optimists (you kind of have to be as a Nokia fan :p) we are always trying to look at the bright side. To me, things look to be slowly clicking in to place for Nokia.

Nokia N9 as well as the new Belle phones sold very well, considering their position, in Q4 2011. Lumia phones were released by mid Q4 2011 to a select number or regions, with increasing availability for both the Nokia Lumia 800 and 710.  The Nokia Lumia phones have been getting a lot of praises with the likes of the 800 and 900 winning awards and lust from the tech blogosphere. There are reports now and again of Lumia hitting best sellers lists, amazingly even in the US for T-Mobile and the 710. Nokia’s home, which not necessarily giving Nokia phones an easy play, seemed to warm up to Nokia Lumia phones. Furthermore, Nokia is already the number one manufacturer of WP phones with their Lumia. But it’s not all Lumia. The Nokia 808 PureView was another award winner that blew everyone out of the water regarding expectations on what camera phones are supposed to be. We are very much looking forward to the release of the 808, as well as Lumia 800 on Sunday and 610 whenever that appears. Basically, little by little, the new Nokia seems to have certain pieces falling into the right place. But that’s just looking at the positives.

Forbes notes that Town Hall Investment Research analyst Jamie Townsend shares this positive view about Nokia, moving the rating of Nokia from Avoid to Buy. Obviously, with the new strategy on WP, a lot of the focus will be on Lumia devices.

“We also believe the pieces are now in place for a gradual reversal in the market share losses experienced in the last three years. Specifically, we are expecting positive unit surprises in the U.S. and Western Europe over the next two quarters, albeit coming off a very low base and expectations.”

http://www.forbes.com/sites/ericsavitz/2012/03/30/nokia-the-recovery-begins-one-analyst-turns-bullish/

They mention something about partnership between Nokia, Microsoft…and RIM being a ‘real possibility’.  Townsend says that Nokia were once the dominant global handset vendor but since the introduction of Jobs’ iPhone, became a has-been in just a few years (sadly seemingly due to incompetencies in execution rather than lack of capability). i.e. this post: http://mynokiablog.com/2012/04/01/weekend-read-nokia-concept-uis-revisited-from-2006/

Townsend adds,

“we now believe that 2012 will mark the year when Nokia reverses the negative trends of the recent past”

http://www.forbes.com/sites/ericsavitz/2012/03/30/nokia-the-recovery-begins-one-analyst-turns-bullish/

More realistically, the recovery isn’t going to be rapid. However, slowly but surely, there is a growing consistency in showing signs of improvement which Townsend says will bring investors back. These are all the various little victories Nokia must build on. Small, but consistent, building up to bigger victories.  Hopefully meaning much improved sales, which may not be seen until Q2/Q3 when Lumia becomes more established and the likes of the 610/900 are finally available to bookend the very low and very high for the Nokia WP7.x experiences.

It is also very important to note that Nokia also has to make sure they’re keeping Symbian sales performing as best as they can, whilst keeping strict to the goal of GRADUALLY transitioning consumers from Symbian to WP (perhaps not only directly swapping, but also picking up new customers where they may have previously lost them).We can see Symbian performing much better in Belle FP1 with beefier hardware (all except screen resolution) with signs of more updates (Belle FP2) already in the works. It would make sense to at least produce more Symbian phones for regions where Lumia will not yet be available. Ideally, Nokia would allow customers the option for both WP/Symbian in the same markets to bring sales to Nokia. Their approach seems to be to push customers towards Lumia, a platform that might have more longevity to attract and keep similar customers. That’s just my own speculation.

There’s some talk about RIM (which for some reason on the weekend, there was a lot of talk about possibly buyers, even partnerships, including Nokia – apparently looking on Canadian Elop for assistance). It is mentioned that RIM is in the place Nokia was a year ago and that whilst recovery is not yet clear with RIM, apparently for Nokia, that recovery is on the near horizon.

We believe investors should wait until the recovery is clear which in our view is not yet the case with RIM, but is now on the near horizon for NOK.  A quarterly conference call apparently suggested RIM are looking for a new partnership to stay relevant. Speculations are that supposedly Nokia/Microsoft would be the most likely candidat. Townsend makes it clear they have no data points to support this, only that it is some how a real possibility over the next six months. That brings up rumours again of a joint bit by Nokia/Microsoft to buy RIM. Why? Do they need to? That’s a whole other post altogether. As long as it’s not rumours of Nokia being the one bought.

Source: forbes

Thanks Heron for the tip!

Category: Nokia, Windows Phone