Summary: Nokia (NYSE:NOK) dominates global mobile handset sales, outpacing its nearest competitor by almost double. It likewise leads in sales of phones with music capability, because a basic music player comes as a standard in many of its phones. The problem Nokia faces is reclaiming the high-end segment as competition intensifies from new super-thin handsets like those by Motorola (MOT) and Sony Ericsson's popular Walkman phone. Nokia just released its latest high-tech handsets, which it calls "multimedia players," this past Tuesday. Market research firm iSuppli estimates the market for music-enabled phones is about $44.6 billion versus around $19 billion for music devices. Ansi Vanjoki, head of Nokia's multimedia unit, says Apple (NASDAQ:AAPL) only competes with "part of" his firm's products, adding, "you can't make calls [and] you can't download music wirelessly" with an iPod. Nokia's acquisition of Loudeye, a digital music distributor with a catalog of over 1.5 million songs suggests it could introduce its own branded music store, which will undoubtedly upset wireless carriers.
Related links: Full WSJ article • Looks Like Nokia's Margins are Getting Squeezed • Nokia Press Releases: New Nseries shines spotlight on music and Nseries delivers latest in mobile multimedia • Nokia's Q2 Results -- Key Facts & Analysis • Who's Phones Are They? Nokia's and Motorola's Features Challenge the Wireless Providers • Conference call transcripts: Nokia Q206 • Motorola Q206 • Palm F1Q07
Potentially impacted stocks and ETFs: Other Nokia competitors: Ericsson (ERICY), Kyocera (NYSE:KYO), NEC (NIPNY), Palm (PALM), Research in Motion (RIMM), Sanyo (OTC:SANYY), and Sony (NYSE:SNE)
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