Nokia Average Selling Price Will Improve On Windows 8; Expect Stock To Triple

Nokia (NYSE:NOK) is valued as a binary call option on Windows 8 success. The market expects steep unit sales declines as Nokia has made some big mistakes. However, this trend is accelerated by expected declines of Nokia Average Selling Prices. I believe that an improvement in product mix will contradict the latter. My model for Nokia ASP evolution and my DCF show the share price can triple. Lately, analysts have struggled with the Nokia valuation.

Most have capitulated and followed the steep share price decline with arcane valuation techniques. The stock is often valued on a deep discount to its Sum-Of-The-Parts calculation, leading to a target price of 0.3x Book Value. This implies that Nokia will keep bleeding its assets as if it has become a German Landesbank in the CDO crisis. I believe there is more value in Nokia as the brand name combined with a decent OS will convert a part of its large installed base into smartphone adoption.

Android opportunity is gone

Stephen Elop is often blamed for the Nokia slide. I believe that is a bit unfair. By appointing Elop to CEO, Nokia glued itself to Microsoft (MSFT) and instantly wrote off billions of Symbian R&D. The move also made 40k R&D FTEs obsolete. Symbian originated from another era and always ran behind the trends. Nokia should have opened up to Android long before. The Fins were too stubborn and kept throwing good money in the Symbian pit. With a timely Android adoption, they could have secured a 15-20% smartphone market share and would still have made low double digit margins. On its low invested capital, that would have been plenty to make an ROI far above cost of capital. The Android opportunity has now passed as Nokia-Android can't catch up with Samsung, nor can anyone else with Android OS.

Large installed Nokia base is opportunity

Nokia missed the first inning of the smartphone race. Apple (AAPL) iOS and Android (GOOG) divided the cake as Nokia was held up in the locker room. According to Statista, there are still 260 million Symbian phones in the global market. Despite the iPhone success, that is still 70 million more than iOS users. The vast mass of Symbian users have not stopped breathing because they had no access to an App store or market. I believe Nokia still stands a chance as these Nokia users upgrade to a smartphone. A study from Internet2go indicates that operator loyalty is more important than the choice of OS. The even larger pool of "stupid phone" users also have other priorities than the early iPhone adopters. Last year, Nokia still had a 27% market share in global handset shipments. The Nokia share will decline further, but I believe the ASP will increase on product mix effects.

The table shows the product mix and the resulting ASP of 54.5 EUR for 2011. Total handset sales of 417 million units resulted in EUR 22.7 billion.

Windows 8 does not have to beat iOS or Android

Microsoft will have to invest in the App developers community to stimulate more choice. A common platform for Phones and Tablets is a good start. The mobile OS is a very competitive market, but Nokia is a strong quality brand, especially in the emerging markets. It is clear that the late adopters care less about phone design or the availability of 5 million Apps. The core Apps like Facebook and some popular games will satisfy most needs.

Windows 8 market potential from Nokia Symbian base

The early reviews of Windows 7.5 and 8 are positive, but no analyst dares to forecast a market share above current low levels in 2 years' time. It is indeed highly unlikely that iOS or Android users will switch back. Fortunately, there is a big pool of legacy Nokia users that still have to upgrade. The Symbian market will evaporate over the next years. Most of the existing 260m Symbian units will upgrade to a new smartphone by 2015. I believe that Nokia can retain 25% of those to the Windows 8 Lumia platform. This implies that they lose 75% of their customers that have so far appreciated the Nokia quality. That still equals 22m units of Windows 8 sold annually over the next 3 years.

Windows 8 market potential from Nokia "stupid phone" base

Nokia "stupid phones" will see a sharp sales decline by 2015. It is hard to imagine that Nokia still sold 340m "stupid phones" in 2011, although mainly in emerging markets. Apple analysts have been salivating over this market potential. However, the gap between a 32 EUR Nokia phone and a 650 USD iPhone seems impossible to bridge on an average salary of 3000 USD. Apple is reluctant to launch an iPhone mini as it will cannibalize its overall ASP. Nokia has less trouble with lower priced smartphones. I estimate that also 25% of these sales will be converted to the Windows 8 label by 2015. This will increase the Windows 8 market share above the current pessimistic expectations.

The ASP will increase in 2013 and support sales

It is clear that the share of smartphones in the handset market will increase and that there is still a large potential of Nokia users that have to make this switch. The ASP will decline for the individual Nokia products, but the change in product mix is pushing up the overall Nokia ASP. Although the units sold decline significantly, sales in EUR will not decline from 2012 into 2013. I expect EUR 16 billion handset sales for 2012.

Nokia ASP will continue to rise till 2015

The market consensus is too pessimistic on the future Nokia ASP. Every 32 EUR phone that is swapped for a smartphone will increase the ASP by a factor 7.8. This will create a lot of value further down the valuation horizon. This is not captured in short term ratios that are used to explain the share decline. I have calculated 3 scenarios with base case, bear case and bull case estimates.

Nokia sales trend normalizes

Nokia now reports its handsets sales under Devices and services, which also includes the Navteq business. I have isolated Navteq sales as it distorts the Handset sales. Nokia's market cap now equals the amount it paid for Navteq. Nokia-Siemens is the network equipment JV and has also weighed down margins over the last couple of years.

EBIT Margins recover to 5.6% by 2014

I don't expect a huge success of the Windows 8 franchise. But the Microsoft link will enable Nokia to right size its cost base. Like Apple, Nokia is an asset light model that has very little owned production capacity.

Apple makes 35% margins with this model and will struggle to keep that level. Nokia makes losses because it is overstaffed. The company already reduced FTEs by a third to 80k. The company is still too heavy and will cut another EUR billion from its payroll over the next year. As the restructuring costs decrease and the cost savings take effect, SG&A on sales should decrease below 15%.

I do not expect a huge improvement in gross margins. Nokia made 40% margins when it was market leader. As a challenger, it will have to price competitively in order to build market share. This is why I do not believe that Nokia will make double digit EBIT margins ever again. The gross margin stabilizes as non-performing models disappear.

Conclusion and DCF valuation

Nokia lost more than 90% of its market value over the last 5 years. There is no doubt that Nokia totally missed the App train and inflated its cost base. Nokia sales and profitability will not return anywhere near its previous highs. My DCF shows that with only a marginal improvement in mix and cost base, the share price will triple. However, the next couple of months will be critical. If the windows 8 Lumia products flop for some reason, the bear case takes over. My Bear DCF shows that this risk is already priced in. I use a Lumia 710 and love the robust Windows 7.5 OS. It doesn't have the good looks of iOS, but can do everything an iPhone can for a third of the price. I experience better Wifi and mobile connection than my last iPhone 4S. The Nokia newsfeed will be easier to follow now. In the past, Nokia bombarded the market with 35 models at the same time, now the Lumia is the key to share price appreciation.

Bear DCF and P&L

Disclosure: I am long NOK. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[Rookie IRA Investor]

"Police in Australia today warned drivers with iPhones not to navigate with Apple Maps after users looking for one city found themselves in barren outback more than 40 miles away."

"Motorists following the much-criticised mapping service to the city of Mildura in the country's south-east ended up in the middle of the nearby Murray-Sunset National Park."

"With no nearby water supplies and temperatures in the park reaching as high as 46C, police warned the mapping error had the potential to be 'life-threatening'."

http://bit.ly/VZvjYz

This is a nice little highly objective report that goes on to mention that Nokia Here has the position of the town marked correctly.

That should be worth a few cents on Nokia's share price, although it should not affect Apple, as Tim Cook has already apologized for its abysmal maps and told people not to use them.

[OSS117]

Just a few remarks about the ATT's Lumia 920 as I'm a proud user of it.
Until very recently, I had a basic phone. I've resisted as long as I could to get a smartphone for years for specific personal reasons. After years of reading reviews of anything that would come out on the market... after testing for days and hours many many phones... I finally bought a smartphone this year. My 1st. And it was the Nokia 920. The sweet ATT's Thanksgiving deal was one factor to convince me.

It is super elegant, displays class, makes me or any owner stand out of the crowd when everyone has an iPhone, it is godly beautiful... It does everything I need in a snappy fast way.
I don't have to make any effort to search for apps or do anything.
Yes it doesn't have all the apps. but I don't care. I'm not that type of user.
I need a phone for baisc things: make clear calls, good battery, excellent camera, media player and web browser.
With respect to these factors taken together, it does everything very very well, and thus beats every phone on Earth, including any iPhone except for a few little things:
the iPhone for example has more quality apps, has a better coloring/sharper rendering on the display and its camera performs better in daylight (and only in daylight)... That's still makes the Lumia 920 second best phone on Earth
And every other cell phone else, sorry to say, is a piece of prehistoric crap compared to these 2 phones. Even the Samsung's Galaxy....
Yes, once you've tried the Nokia Lumia 920 (the black and red ones are the most gorgeous in my opinion), it's hard to go back to anything else unless your priority is size and apps...
My only big real complaint, is not about the weight, but the size.
It has a 4.5" screen but Sony Xperia makes 4.6" phones thinner and smaller. Well, the Nokia is really a BMW or Mercedes... not like the Toyoti-sh iPhone.

So why do I brag so much about it here with the risk of annying a few ones... Beside personal feelings, I just wanted to point out that this is not the hit-miss Nokia Lumia 900. That phone was... say... a rough draft. The Lumia 920 is THE real hit, the game changer that Nokia needed to survive. My feeling, but only time will tell.

[Sunil Shah]

solucky, my character assessment of you, albeit in a very short presumptuous time, is that you're a dreaming wanderer. Not much use to me. But all the same, we are both long Nokia. good luck.

[solucky]

Not really a dreamer, i have a technicall background not a financial.
I decide many times not allways from a product side, if i find a good product from a cheap company i give it a try.

I had at sample hyundai motor stocks as the most dont know that they produce cars, or gave companys a chance that go bankrupt later . But on a few like Cargolifter i made a profit because i adopt it early and left early enough :), that company goes bankrupt but love the idea.

[solucky]

With 10% marketshare, we Nokia longs would swim in money :)

[Sunil Shah]

solucky i dont believe in luck, alas. quantify please, or rather wim pls quantify

[solucky]

I dont believe in 10%, its more a dream. If we dont see a miracle i guess WP8 together might see 10% end of 2013 and Nokia have 60% from this cake.

But also that would be not bad

[Sunil Shah]

wim

if the lumia phones take 10% market share of smartphones in the first world in 2013, how much does Nokia make in cashflow.

Ceteris Paribus.
thanks

[Bill Herbert]

Wim, you said

>>The difference is that they still have a large installed base that does not think or act like most iPad swagging analysts that write off Nokia every study they release. The beauty is they do not have to make 25% margins till eternity, like AAPL does. They can fly with an 8% margin by 2015. <<

I'm looking at the future, not the past. NOK was the leader in overall handsets, but now they are getting trounced in mid-range and higher-end phones and tablets. The low end is up for grabs at this point. They do not have a product yet that is taken seriously by anyone.

Android will rule the Asian markets within a short time - in fact, they already do to a large degree. Chinese companies will make $75 Android knock-offs that won't be like the S3 but will work for basic email, web search, sms and so on, with pretty good graphics. These are easy to manufacture cheaply at scale - all the tech is already known. And the Asian markets are much smarter than the USA - they basically give away very cheap high-speed broadband, so people on low incomes can still enjoy - and afford - a smartphone and get all the ancillary benefits.

Agreed, NOK "could" get back in the game with Lumia - but last quarter's reality check was:

>> Lumia Q3 volumes decreased quarter-on-quarter to 2.9 million units, as we shared the exciting innovation ahead with our new line of Lumia products. <<

Time is running out here for NOK - the complicated ecosystem of phone platforms goes way beyond just cranking out handsets - it's user experience, design, trendiness and status effect (a much bigger factor than many realize), as well as the lock-in factor - people will stick with a winner once they get used to that system, and until something way better comes along. Apple grabbed a dominant position, and Google is a very agile competitor, with the smartest CEO on the planet. Guys like Ballmer and Zuck are kind of unimpressive compared with Larry Page and company, if you ask me.

Anyway, it will be interesting to see what the NOK team can come up with, but another flop will be so damaging that it may be fatal. I'm not sure if Elop has what it takes, to be honest. And the phone market requires HUGE gambles on the next wave of style and innovation - but unfortunately, NOK is way short of chips, both in cash and in management capability. They need MSFT in the worst way - I'd really like to see WP8 and the new Surface take off, and be followed by more phone success by MSFT/NOK - but I'm not gonna hold my breath. It's quite a predicament for both of these companies, IMO.

You also stated >>Of course, there is still a scenario possible that Nokia ends up in my bear case, but even then, I believe that is priced in. The odds are in my favour<<

I guess time will tell - but I'm not willing to place a bet on NOK right now - you can read the odds however you like - but I pass.

[solucky]

You should not look so much on Smartphones. If you look to the Lumialine itself, we talk about 1,2,4,2.6 million /Q so the last quarter they sold 35% lesser Lumias ( old and not upgradeable ) than in the best quarter .

Thats the normal business also Apple sold arround 35 % lesser 4s in front of the IP5. Myself " Speculate " with arround 25-30 million Lumias in 2013.

And additional there is also NSN a part of Nokia, nearly complete restructured, in a good position for LTE Networks and they had a record quarter !!.

But sure you can also observe the stock and wait untill you see an improvement yourself.

[wmspillett]

Microsoft has worked hard at addressing the concerns that have been discouraging its traditional corporate customer base from investing in WP7, and full inter-operability of Windows Phone 8 with Windows 8 is just the tip of the iceberg, they have up their sleeves a raft features and apps that should prove to be the wet dream of many a company's IT manager.

So far, MSFT has always been an "also-ran" in the mobile market, which gives them a finite lifespan as we begin to enter the age where the smartphone and tablet make serious inroads into the tradiitional desktop and laptop markets in the consumer space.

What MSFT appear to be trying to do is repeat the coup that they staged in the 1990s - remember the days when if you wanted to deal electronically with companies around the world you needed an "IBM-Compatible" PC powered by MS-DOS and later Windows? After conquering the corporate world, MSFT naturally filtered down into the home market as people began to want not to use different systems at home and work, forcing many otherwise excellent computer system manufacturers out of business and hey presto! The world ran on Windows with Apple taking a small share of the market which for a number of years sustained them. Note: without the success of the iPod and later the iPhone, Apple might have long-since disappeared.

I'm not saying that MSFT is going to wipe the floor with the competition quite so easily as they did a couple of decades ago, life in today's techno-world is not so simple, but if they get this right they stand to steadily steal corporate business from RIM and from others.

The Geek community will still love Android, and that if we are honest is where a lot of the Symbian customer base went post-Elop; and the cult of Apple stands to continue to hold loyalty even though the latest iPhone5 and iOS6 have been much-publicised disappointments in terms of innovation; but for those who who do not belong firmly in those two camps there is now a third way. If MSFT is able to drive strong growth in its home territory, the corporate market, we will begin to see Windows-based mobile products finding homes with consumers on the back of that. Maybe not to today, maybe not tomorrow, but soon...

Getting back to NOK, those outside North America will be well aware of Nokia's past history with the corporate market with the Communicator series in the late 1990s/early 2000s and later with the E-Series. NOK is perhaps in a much better position to ride that corporate wave with MSFT than HTC, Samsung et al, which could be the company's saving grace until W8 and WP8 find a place in the hearts and minds of the everyday folk.

[KenC]

Wow, so much to comment on, but I'll just focus on a small part:

"However, the gap between a 32 EUR Nokia phone and a 650 USD iPhone seems impossible to bridge on an average salary of 3000 USD."

One, in developing countries like China, people who carry 32 euro Nokia phones, if they consider upgrading to an iPhone, don't consider new iPhones, but the used secondary market, where smartphones can be had for around $200. Further, those people don't just consider iPhones, but also very inexpensive Android phones made by ZTE and Huawei, etc. The fact that you make a comparison to a new iPhone, and neglect to mention the secondary market for used iPhones, or entry-level Android phones should give anyone pause when considering your superficial analysis, that cloaks its shallowness in a pile of numbers.

[Wim Lewi]

My comparison with the iPhone is indeed a sneer to the Apple analysts that have taken this potential in their number. I just can't resist that, because one company gets all the benefit of the doubt, while Nokia gets no credit. By hanging on to only 25% of their installed base, I leave enough space for the ZTE's and other cheap android players. But these have been around for many years and have not dented the Nokia position in Asia. I admit that I use a lot of numbers and models and that the margin of error in each of the assumptions can add up. But, I still believe that it is better to try to model out a situation, than to let emotion take over. Now the market is extremely bearish on Nokia. I don't have a crystal ball, but I believe the odds are in my favour and sketch a future that will prove my point.

[HSAIN]

Nokia Asha sales were not bad. I think the look and feel of the Asha is better then the Lumia. Wim Lewi what are your thoughts on Asha and do you think the current phone design of Lumia is just fine.

[Wim Lewi]

I am not a fan of the Asha range on the long term as it stands in the way of the W8 or W9 adoption, I can see it as a transition period in order to keep their installed base warm, especially in EM. I am afraid that in the Western markets it will disappointsome users that had higher expectations from a smartphone. These expectations, like push-email, browsing, etc... could be better answered with a Lumia. Design is hard to judge, I find W7.5 very well designed as it comes to operating the system and making the phone do what you want it to do, in that sense I find it much better designed than Symbian, but also matches iOS. If you are talking about the look and feel, I have to admit that iOS still has the edge, but I don't care about that. On originality, W8 scores, simply because it is different than iOS, while Android tries to be same.

[godalmightee13]

Published October 18, 2012 | By Nokia - Press Release
Nokia Corporation Q3 2012 Interim Report

October 18, 2012 at 13.00 (CET+1)

This is a summary of the third quarter 2012 interim report published today. The complete third quarter 2012 interim report with tables is available at http://bit.ly/T1kZeD. Investors should not rely on summaries of our interim reports only, but should review the complete interim reports with tables.

FINANCIAL AND OPERATING HIGHLIGHTS

Nokia Group non-IFRS EPS in Q3 2012 of EUR -0.07, reported EPS EUR -0.26
- Nokia Group achieves operating profitability on an underlying basis, with Q3 non-IFRS operating margin of 1.1%.
- Nokia Siemens Networks non-IFRS operating margin significantly improved quarter-on-quarter and year-on-year to 9.2% in Q3; company executing well on restructuring and strategy that focuses on key markets and product segments.
- Devices & Services Q3 non-IFRS operating margin improved quarter-on-quarter to negative 7.4%.
- Nokia Group ended Q3 with gross cash of EUR 8.8 billion and net cash of EUR 3.6 billion.
- Nokia Group Q3 net cash from operating activities of negative EUR 429 million, including cash outflows related to restructuring activities of approximately EUR 390 million.

Nokia Group net sales in Q3 2012 were EUR 7.2 billion, down from EUR 7.5 billion in Q2 2012
- Nokia Siemens Networks net sales increased quarter-on-quarter and year-on-year to EUR 3.5 billion.
- Lumia Q3 volumes decreased quarter-on-quarter to 2.9 million units, as we shared the exciting innovation ahead with our new line of Lumia products.
- Mobile Phones Q3 volumes increased quarter-on-quarter to 77 million units; strong sales start for new Asha full touch smartphones, with volumes of 6.5 million units.

Commenting on the Q3 results, Stephen Elop, Nokia CEO, said:
"As we expected, Q3 was a difficult quarter in our Devices & Services business; however, we are pleased that we shifted Nokia Group to operating profitability on a non-IFRS basis.

In Q3, we continued to manage through a tough transitional quarter for our smart devices business as we shared the exciting innovation ahead with our new line of Lumia products.

In our mobile phones business, the positive consumer response to our new Asha full touch smartphones translated into strong sales. And in Q3, our mobile phones business delivered a solid quarter with sequential sales growth and improved contribution margin.

In Location & Commerce, we made progress establishing our platform offering with customers like Amazon. This is in line with our plan to expand our location offering to more customers.

And, Nokia Siemens Networks had a remarkable quarter in which we achieved record profitability on a non-IFRS basis and the Nokia Siemens Networks cash balance increased for the fourth quarter in a row.

While we continue to focus on transitioning Nokia, we are determined to carefully manage our financial resources, improve our competitiveness, return our Devices & Services business to positive operating cash flow as quickly as possible, and ultimately provide more value to our shareholders."

[Wim Lewi]

I agree, I also checked the IR site. The results are not worse than expected, I guess the market was short going in the results. The stock lost at first, but is ramping up now. I can't remember a Nokia results day over the last 3 years where the stock has not moved by less than 10%. Most were down, but looks like times are changing. Now that things are not getting worse, they still have to improve to get the share back above 6 EUR.

[Wim Lewi]

Nokia results are out,
ASP declined to 43 EUR, because the Lumia's were held back by the launch of W8 and stronger than expected sales in EM of cheap handsets. My expectations are still valid as the Lumia mix will improve with W8. The profitability improves as the cost base is scaled down. Cash flow before restructuring was only 40m negative, these are by no means good results but the market was hoping for worse. Networks made a strong margin, that is still 14bn in sales. That is not valued as the market is too focused on the HS market. It is good to get he results out of the way, now it is waiting for the 920 and 820 launches.

[solucky]

And the most misses the general network business for the next years, the expected growth rates for LTE are excellent.

http://bit.ly/TuIhKF

[redcars]

Nokia will gain traction in the business market with its Windows interoperability. Loser will be RIM. If Microsoft decides to sell a phone of their own, I wonder if they'll just do a licensing deal with Nokia.

[Wim Lewi]

I found this article on Bloomberg that underlines the potential of the smartphone market : http://bloom.bg/Vau9Np
Sadly it doesn't state how many stupid phones there are in the market that need to upgrade. Only that 1 billion extra smartphones will be sold by 2015. That comes on top of the replacement of the 1 billion smartphones that are already operating. The article also confirms that the new smartphones will be sold mainly in EM. The market has overlaid the current market shares over these sales. That seems unlikely to happen. Samsung will be No1 for sure, but I dont believe that the unit smartphone sales of Nokia will be far behind the iPhone. In USD sales the iPhone will win, but still this will be a huge surprise. The iPhone mini will be the answer to defend share, but the problem is that "creative" people in the West will also snap up those iPhone mini's. It is a global market place.

[Bill Herbert]

Wim - I appreciate your enthusiasm for the prospects at NOK, but let's get real on a few key points:

You said - "Symbian originated from another era and always ran behind the trends. Nokia should have opened up to Android long before. The Fins were too stubborn and kept throwing good money in the Symbian pit. "

That is true - but the severe damage of the delay/missed opportunity is rather large, no? I don't think this is an easy fix - and I'm not sure if the Windows platform will do the trick. We will have to see about that - but I'm very skeptical about NOK being able to play catch-up with the big boys - Apple and Samsung/Google.

These are two very powerful multi-talented operations that combine design, excellent quality manufacturing and performance, creative new features, not to mention great software and user experience. Nokia is way, way behind in ALL of these areas, let's face it.

Further, you said " Nokia missed the first inning of the smartphone race. Apple (AAPL) iOS and Android (GOOG) divided the cake as Nokia was held up in the locker room." - Wow, what an understatement! I would say in contrast to your assessment, that NOK is two games behind in the Series and down 4-2 in the fourth inning of the third game. Further, they weren't just stuck in the locker room, they were inextricably hung up in their own jockstrap and in need of some quick coaching solutions - which they never got. They are a team lost on the field, trying to find a way to get in the game, with a blur of activity they are reacting to, not participating in in any meaningful way.

Lastly, you said "However, the gap between a 32 EUR Nokia phone and a 650 USD iPhone seems impossible to bridge on an average salary of 3000 USD. Apple is reluctant to launch an iPhone mini as it will cannibalize its overall ASP. Nokia has less trouble with lower priced smartphones." That's a valid point, but where does it leave the former market leader?

In the dust, that's where. NOK's best shot is to spend a few billion (which it doesn't really have) to develop an amazing low-end, very solid and functional smart phone that will serve the mass non-U.S, non-Euro, non-China market. Otherwise, I really don't understand where their market opportunity is.

It is definitely not in competing with the two current leaders - that ship sailed about 2.5 years ago, and Elop was not able to perform an immediate re-focusing. I'm not sure if it was possible then, but it didn't happen - instead NOK became the deer in the proverbial headlights - it stood still, and got run over.

Their best hope is to partner with wealthy MSFT and provide a phone with basic pre-loaded Apps that do the standard useful stuff - and let owners get more free Apps of their choice every so often within the contract. MSFT will need to prime the pump by sponsoring App competitions as well as dedicating several hundred talented developers in Redmond to churn out thousands of cool apps over the next few years.

Otherwise, you can kiss NOK goodbye - sad to see it go, but that's what will be the end result, I'm afraid.

[solucky]

Apple lost 50% of there market share mainly to samsung in a few countries. So i see no reason that Nokia cant pick up 2-3 % more from the high end market.

[mr wonder]

@Bill Herbert. Did you take a look at the news lately??

"NOK being able to play catch-up with the big boys - Apple and Samsung/Google."

If you think Nokia is a small boy, how do you consider Microsoft then?

"Nokia is way, way behind in ALL of these areas, let's face it."

I assume you did not read comparisons between Lumia 920 and the top toys of your big boys. How about Nokia Maps as compared to Apple maps? Does Samsung have an in house mapping devision?

Btw, did you see pre-order stats around Europe? Lumia 920 tops i-P5 everywhere.
Lets face it, Nokia together with Msft is gaining in on your big boys, whether you like it or not.

[Wim Lewi]

I agree that the last 8 quarters were very tough, but 3 years (2015) is a long time in Tech years. In 1997 Apple itself was in trouble and if they didn't get a lifeline from MSFT, we would still be puzzling with the Symbian OS. I would agree that Nokia is a non-starter if they were new to the market. The difference is that they still have a large installed base that does not think or act like most iPad swagging analysts that write off Nokia every study they release. The beauty is they do not have to make 25% margins till eternity, like AAPL does. They can fly with an 8% margin by 2015. Of course, there is still a scenario possible that Nokia ends up in my bear case, but even then, I believe that is priced in. The odds are in my favour. A little Lumia success is key.

[mr wonder]

Wim Lewi: Are you sure Devices & Services includes Navteq business? I thought Navteq was within Location & Commerce.

[Wim Lewi]

You are right. That is my mistake. I somehow believed they once tried to hide the figures after it became clear they overpaid by a factor 5 or 10. That is water under the bridge now. The Nokia Drive application is based on Navteq, so does somehow gets a return in the Device and Services segment as it attracks buyers. I often use it, but must admit it can't match the Tom2 app on iOS or Android. There is no Windows version yet. Thanks for pointing out.

[Jabbertherapy]

Sales of ordinary phones are great. The fixation of market analysts on the latest technology is rather silly. Frankly, mobile phones are overrated gadgets anyhow. All anyone needs is a basic phone in Africa where traditional lines aren't available. People in America don't even need these nuisance devices. I'm long NOK because they have such a large market share in basic phones.

[Sunil Shah]

wim your comment: ' According to Statista, there are still 260 million Symbian phones in the global market.'

Are these symbian phones still in use? Or ones purchased that might be rotting in a drawer or in the trash.

Does this number tie in with market share as per the various O/s?
And are all symbian phones nokia, or can they be other brands

thanks in advance!

[solucky]

I dont know the contract details between MSFT and Nokia, but i guess they cant switch easy to Android. Guess Nokia will have a few benefitz more than Samsung with WP8 and from the price its arround the same.

[jnffarrell]

What you say about Samsung's Android products killing any hope for Nokia/Android prospects go double for Samsung/Windows products overwhelming any chance for Nokia/Windows phones.

[RT1968]

can't wait for the Windows 8 Lumia phones to come on market... they are awesome phones...