Nokia Hits Multi-Year High on Forecast of Market Share Gains, Motorola Dips

Nokia said in a press release it expects sequential global device market share growth in Q2, from its estimated 36% share reported in Q1. It had previously forecast no change. Nokia's shares climbed to multi-year highs, as the firm also targets share growth for the full year. Ordinary shares of Nokia in Helsinki gained 3.9% to €19.14, for their highest close since 2002. Nokia's ADRs rose 3.6% to $25.96, also a new multi-year high. An analyst at Nordea Bank in Stockholm commented, "Nokia's economies of scale are kicking in, demonstrating that it can increase market share while maintaining solid profitability." Nokia said it "believes that its device shipments in Q2 2007 will be positively impacted, as excess device inventory in the market has sufficiently cleared." Analysts point to rival Motorola's now failed attempt to compete on price in order to gain market share -- Q1'07: 18% vs. Q1'06: 20.4%. Its shares lost 0.9% to $18.16 Monday.

Sources: Press release, Bloomberg
Commentary: Apple's iPhone and The Future of Nokia • Motorola: Investors Want Cool New Handsets • Nokia Posts Profit, Margin Beat -- Shares Up 3.4%
Stocks/ETFs to watch: Nokia Corp. (NOK), Motorola Inc. (MOT). Competitors: Samsung [not traded in the U.S., but an 18% component of iShares MSCI S. Korea (EWY)], Sony Corp. (SNE), Telefonaktiebolaget LM Ericsson ADR (ERIC), Palm Inc. (PALM), Research In Motion Ltd. (RIMM). ETFs: streetTRACKS Morgan Stanley Technology Index Fund (MTK), HOLDRS Wireless (WMH)
Conference call transcripts: Nokia Q1 2007, Motorola Q1 2007

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