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On July 17, Nokia Corporation (NYSE:NOK) posted strong Q2 results that topped analyst estimates, driven by 21% growth in mobile device sales to 122 million units, an average of 1.35 million units per day. In the converged mobile device section, sales grew 10% to 15.3 million units, much more than the iPhone’s target for the year. But then, Nokia is the giant here with a 45.2% smartphone market share, and Apple (NASDAQ:AAPL) only has 5.3% of the pie. In addition, with Nokia’s touch screen device, Tube, expected to reach the market later this year, the convergence device race is heating up further. My earlier post on Nokia’s convergence device strategy is available here.

Nokia, which had a 48% stake in the handset software firm Symbian, recently spent $410 million to buy the rest of the company and form the open-source Symbian Foundation with other industry leaders including Sony Ericsson (NYSE:SNE), Motorola (MOT), AT&T (NYSE:T), and Vodafone (NASDAQ:VOD). Last year, Symbian had 67% of the global smartphone market but less than 10% of the U.S. market. You can see a detailed analysis on how this move changes the smartphone game, here.

Basically, the iPhone has reaffirmed that the differentiation in the smartphone business will be in software. Apple has also been hinting at vertical integration. In order to gain some control over the soNokia, to get some control over the software side, needs to beef up Symbian.

For Q2, net sales grew 4% y-o-y and q-o-q to €13.2 billion, exceeding analyst estimates of €12.8 billion. Diluted EPS, excluding special items, was up 13% y-o-y to €0.36, in line with analyst estimates. In Q2, Nokia bought back shares worth €1.5 billion. Last week, it completed its acquisition of Berlin-based Plazes to extend its context-based service offering. By segment, Nokia recently clubbed Mobile Phones, Multimedia and Enterprise Solutions into the Devices & Services segment, which had net sales of €9.1 billion, down 1% y-o-y and 2% q-o-q, with ASPs down 18% y-o-y and 6% q-o-q to €74. Nokia Siemens Networks net sales grew 18% y-o-y and 20% q-o-q to €4.1 billion. Navteq will be a reportable segment in Q3. As for market share, Nokia estimates that Q2 Mobile Device market share grew to 40%, up from 38% last year and 39% last quarter.

By region, sales grew 10% y-o-y and 73% q-o-q in North America. Europe was flat y-o-y and grew 5% q-o-q; Latin America grew 39% y-o-y and 28.6% q-o-q; the Middle East and Africa grew 23% y-o-y and 4.5% q-o-q; Greater China grew 11% y-o-y but was down 16.2% q-o-q; and Asia Pacific showed the highest y-o-y growth at 42.2%.

Nokia does not expect its market share to change in Q3 but aims to increase market share for 2008. It expects global mobile device volumes to grow 10% in 2008. Nokia is currently trading around $27 after a 52-week low of $23.58 on July 1, which was a great buying opportunity into the convergence device movement.

Chart for Nokia Corp. (<a href='http://seekingalpha.com/symbol/nok' title='Nokia Corporation'>NOK</a>)

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Source: Still Bullish on Nokia