Strong Nokia (NOK) Lumia Sales are All Smoke and Mirrors - Analyst

November 29, 2012 11:36 AM EST
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Shares of Nokia (NYSE: NOK) have been on fire of late as early sales of Lumia are seemingly strong and investors sentiment is improving. However, one analyst is out today throwing cold water on the new-found enthusiasm.

Deutsche Bank analyst Kai Korschelt said recent press reports on Lumia stock-outs are "misleading." The firm's retail and industry research indicates these initial stock-outs are caused by limited device supply, rather than overwhelming demand. "Anecdotal evidence suggests that many stores have only received 5-20 devices/store with wider carrier distribution delayed in some countries such as Germany & UK." The reason for the low supply may be continued shortages of 28nm components, the firm said.

Adding insult to injury, the firm's initial retail surveys in the UK suggest less than 10% market share in the first weeks post launch, which is lower than the Lumia 800 launch one year ago. Google search interest is also underwhelming and only at levels similar to last year's 800 launch. "Our analysis suggests current consumer interest could drive potential Lumia shipments of 5-6m per quarter next year, well below consensus expectations of 30-35m units for 2013 (DBe 23m)."

Due to slow production/supply ramp of the new Lumia 820 & 920 devices, Deutsche Bank sees risk to Lumia units sell-in estimate of 4m for Q412. The firm is also maintaining its 2013 Lumia shipment estimate of 23 million, well below the consensus.

The firm is maintaining a Sell rating and EUR1.5 target on Nokia on limited consumer traction for Nokia's Windows 8 devices in a highly competitive and duopolistic (Aple/Android) smartphone market. They also believe low-cost Android smartphones will start to cannibalize Nokia's mobile phone business, driving continued revenue declines.

For an analyst ratings summary and ratings history on Nokia click here. For more ratings news on Nokia click here.

Shares of Nokia closed at $3.27 yesterday.

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Ignoring Carrier Comment
ymcpa on 2012-11-29 13:35:10
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He is ignoring comments from carriers in France, Germany, England and Australia that demand has been exceeding expectations. Also today it was reported that the phone sold out in 7 hours in Hong Kong. I think he needs to do more research instead of just checking his local store and google searches.

Nokia Lumia phones
Lulu on 2012-11-29 12:57:02
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This crazy DB analyst is an as*h*le. He just want to bring down the price of Nokia stock, so he can buy it at lows.

wishful iAnalysis
asherpat on 2012-11-29 12:49:46
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wishing for the downfall of any cool competition to Apple

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