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Likely pressuring Nokia (NOK -1.9%) today is a downbeat note from Goldman's Rick Schafer....

Likely pressuring Nokia (NOK -1.9%) today is a downbeat note from Goldman's Rick Schafer. Schafer, who's slashing his 2013-2015 revenue, EPS, and smartphone volume estimates, calls the feature set of the Lumia 720 and 520 "relatively undifferentiated," and notes a recent Goldman survey indicated "only around 41% of Win Phone owners chose to buy another Win-based device over the last six months." (earlier)
Comments (30)
  • This guy clearly doesn't understand Nokia's strategy. The 720 and 520 have undifferentiated feature sets by design. Engadget interviewed Stephen Elop and he explained that their strategy is create a flagship device (the 920), and then filter bits and pieces of that phone's feature set down to the mid- and low-range handsets to try to bring those features to more markets. The feature differentiation does not matter nearly as much as the PRICE differentiation. The 520 is an amazing phone because it borrows features from the flagship and sells them for an unbelievably low price. The idea is to flood developing markets. The fact that an extremely low-end handset (520) has little differentiation from a mid-range (720) handset should be seen as a PLUS. Anyone twisting that into a negative is just looking for reasons to discredit the company.


    Also, I'd love to see the full survey referenced here because similar surveys that I've seen put Android's numbers well below the 41% mark. What are Android's numbers in this particular survey?
    11 Mar 2013, 02:33 PM Reply Like
  • GS makes billions of money just by misleading people. With high-frequency trading computers, fake news sites and fraudulent sell or buy recommendations, they are just out to make retail investors click the sell or buy button in suchs a way that they can fill their greedy pockets.

    12 Mar 2013, 06:26 AM Reply Like
  • Thanks for the link. Do you have any information on these fake new sites? I have not come across these yet.
    12 Mar 2013, 06:57 AM Reply Like
  • Nokia MUST stop shooting itself in the foot!
    12 Mar 2013, 08:41 AM Reply Like
  • Nokia reminds me of an awkward male teenager, insecure with his recent growth, not sure how to handle himself, the voice of a man and child still fighting. Certainly, Nokia's clout and calm has waned.
    12 Mar 2013, 01:11 PM Reply Like
  • Doe that mean that Goldman is buying some more NOK?
    11 Mar 2013, 02:37 PM Reply Like
  • lol GS is probably stocking up on the dip
    11 Mar 2013, 02:41 PM Reply Like
  • Somehow GS have escaped scrutiny when they professed something in public and acted in contradictory manner for themselves. I would not be surprised if they are loading up on NOK.
    11 Mar 2013, 03:05 PM Reply Like
  • The 720 and 520 should have featured a Shimano XT chainset, disk brakes and orthopedic saddle. No wonder GS downgrades.
    11 Mar 2013, 03:13 PM Reply Like
  • The feature sets may be relatively undifferentiated, but the pricing is not. The Lumia 520 is pitched at markets where the entry point pricing for smartphones is more sensitive (i.e., lower) than the Lumia 720.
    11 Mar 2013, 03:17 PM Reply Like
  • Goldman appears to be the largest institutional shareholder behind Dodge and Cox as of most recent records. Maybe the right hand at Goldman does not know what the left is doing? Hard to imagine that.
    11 Mar 2013, 03:30 PM Reply Like
  • You can't know if GS has already sold off big or if the majority of their holding is for clients.
    11 Mar 2013, 04:01 PM Reply Like
  • @ Systembolaget


    You should know better by now.



    Btw, how would GS justify buying/ holding the majority of NOK for their clients, while giving Nokia a "sell" rating at the same time? Rather twisted, isn't it...
    11 Mar 2013, 07:41 PM Reply Like
  • GS, MS, JPM are in a league where no justification is needed. They have sent irrational signals for so long that nothing surprises me. I mean, claiming that Apple's iPhone is per se better than Nokia's Lumia 920 is plain stupid. Claiming that the new Lumia 720 is an old fashioned device is even more stupid. Basing their WP8 uptake rationale on the exact period where the old Lumia range was winding down sharply and the new Lumia range was not even properly available is the final stupidity in GS's "analysis".
    11 Mar 2013, 07:48 PM Reply Like
  • Hi mr wonder!


    Another good question is: how did Goldman Sachs cut NOK price target from $4.8 to $3.5, when they had already cut the price to $1.7? (just a few months ago)


    So... How was the price target $4.8 now? Makes no sense at all. These guys should be a lot more transparent about their ratings and they should never be allowed to be invested on the very same stocks they rate.
    12 Mar 2013, 06:15 AM Reply Like
  • Is it just possible, System*, that the NY crowd of analysts all use iphones? That's fine for them because the US system with adapters, docking ports, etc is set up for them rather conveniently. However, I doubt that most of those folks have walked down some of the dusty, and not-so-dusty corners of the real world like I have, where Nokia maintains a legendary reputation for durable phones. Indeed, one problem for Nokia may be that the old phones are so reliable, replacement is slow. Might one also speculate that the recovery of Nokia will happen most quickly upon the recovery of Europe? All the best.
    13 Mar 2013, 12:18 PM Reply Like
  • "only around 41% of Win Phone owners chose to buy another Win-based device over the last six months."


    The last 6 months is probably the second-worst period to survey Windows Phone owners, save around 2010 when the iPhone made Windows Mobile look extremely outdated.
    * Q3 2012, Lumia 900 owners learned their phone *can not* be upgraded to Windows 8.
    * Q4 2012, Lumia 920 was up to 6 weeks backordered.


    Not a good timeframe for customer satisfaction, not at all.


    NOK satisfaction has shot up from 30% to 42% in the last 3 months alone (probably the survey where that 41% number came from):



    My take: NOK users (after dealing with backorders) are barely just figuring out the features of the Lumia line, and haven't scratched the surface of the unified MSFT ecosystem. As users learn how much quality and attention to detail went into the Lumia, I would imagine this figure to change for the better.


    2014 will be a drastically improved picture for NOK and MSFT, given they maintain their relationship.
    11 Mar 2013, 04:16 PM Reply Like
  • "My take: NOK users (after dealing with backorders) are barely just figuring out the features of the Lumia line, and haven't scratched the surface of the unified MSFT ecosystem. As users learn how much quality and attention to detail went into the Lumia, I would imagine this figure to change for the better."


    Yes. That's what serious "analysts" should have taken on board since the September 2012 launch of the Lumia 920. I remember it took some time to figure out the possibilities on the iPhone or my car's navigation, sound and entertainment systems.
    11 Mar 2013, 04:46 PM Reply Like
  • Nokia could be selling 8M phones this quarter which will probably push it to $5.
    11 Mar 2013, 04:32 PM Reply Like
  • I think 6M phones this quarter is a more reasonable estimate, but 9-10M phones in Q2 shouldnt be impossible.
    12 Mar 2013, 07:37 AM Reply Like
  • NOK Q4 2012: 15.9 million smartphones. 4.4m Windows, 2.2m Symbian, 9.3m Asha.


    That was with all of the supply problems and losing 1/3 of their quarter on people holding off for the Windows Phone 8.
    12 Mar 2013, 07:08 PM Reply Like
  • Rick has a SELL rating on NOK, yet his boss GS has been buying NOK like its the second coming. I smell some thing fishy here!!!
    11 Mar 2013, 04:36 PM Reply Like
  • GS buys and holds shares for their clients' option deals and nobody knows what happened to the size of GS's NOK holding since the 31st December 2012.
    11 Mar 2013, 04:48 PM Reply Like
  • I am not using a tablet or a smartphone to type this. I am using an old fashioned desktop computer, which you need for everything other cheching your e-mail. Most desktops use Microsoft Office. When people realize the "manifest destiny" of the Windows echosystem there will be no alternative to Win based smartphones and tablets. Nok is on very solid ground.
    11 Mar 2013, 06:42 PM Reply Like
  • The majority of so-called "financial analysts", who can apparently run entire investment businesses off of their tiny touchscreen devices, would disagree that PCs and W8/WP8 should even exist :)
    11 Mar 2013, 07:24 PM Reply Like
  • First off, only amateurs pay much attention to "Analysts". They have their own agendas, and rarely do they coincide with the retail investor.
    Certainly some of GS purchases of $NOK are for clients, but you can bet that they are loading quite a few up just on it's own prospects. Back in the fall, they kept reiterating "SELL" on NOK while they became the largest single shareholder. That cannot be because they had more clients wanting Nokia shares than any other firm. NSN alone should be worth a fair amount of Nokia's value. Add in "Here" (the mapping plus Navteq) and the only thing holding institutions from buying more into $NOK is the sub $5 price barrier.
    This downgrade will be quickly forgotten once Q1 numbers come out, and NSN's value is really seen. Add in $NOK's 78% share of Win8's mobile sales and we shall see.
    11 Mar 2013, 08:27 PM Reply Like
  • Napolean's Maxim: "Never attribute to malice that which can be explained by incompetence."


    On that basis Schafer is just an idiot. The Nokia range most certainly is differentiated in terms of the hardware. Lower spec phones typically don't have 4G (LTE). There are also differences in processor capabilities and speeds, onboard memory, screen resolution, quality of glass used for screen, quality of camera(s), presence of compass, gyrosocope, possibilities of wireless charging, adding memory, changing covers, etc., etc.


    The only software differentiation arises because of hardware differences. For instance there are one or two games out there which require more than 500MB memory. If you buy a lower spec phone which only has 500MB memory then you won't be able to run those games.


    Similarly lower spec phones may be missing the gyroscope or compass. Apps which rely on these won't run on those phones.


    Maybe Schafer only looked at software capabilities and didn't bother looking at the hardware. Not doing his job properly? Well, he is an analyst after all.
    12 Mar 2013, 05:16 AM Reply Like
  • IMO Verizon is less than a month from release of the "928" or Laser or whatever they call it. If it has the 41 MP camera, I know I'll get one. My contract is due for renewal this summer, so I should get a good deal. They already offered me a free 822 for renewal.
    Once Verizon has it, Q2 should be pretty good for $NOK in the US.
    I'm in for a long haul, not going to get pushed out by any "Analyst" whatever his company. I think GS and JPM are backing big trucks up now that it dropped below $3.5 today.


    As an aside, Anyone know how to make the "Euro" symbol on an English Keyboard? What the ASCII # is?
    13 Mar 2013, 08:22 PM Reply Like
  • OW, my contract was up over a year ago.. how's that for waiting for the perfect phone!


    Regarding the € character...


    run charmap on a windows PC.
    Select advanced
    enter 20AC in the "go to unicode" field and you should get €
    That's the unicode encoding


    You can also find it here
    14 Mar 2013, 12:13 AM Reply Like
  • Thanks, for Times New Roman it gave me keystroke alt-0128
    So the easy keystroke is hold down the alt-key while inputting into the numpad 0128 € (It doesn't work to enter those on the number bar on top above the qwerty. If you skip the zero first you get Ç for the £ you type in alt-0163.
    14 Mar 2013, 11:51 PM Reply Like
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