Low-End iPhone Could Spell Trouble for Nokia (NOK)
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Investors are punishing shares of Nokia (NYSE: NOK) on Wednesday, sending the stock down by over 8 percent. The price action today suggests Nokia investors remain a jittery bunch. Those jitters are being exacerbated following news yesterday that Apple (Nasdaq: APPL) was going to attack the low-end of the market with a competitively priced iPhone.
Apple's investors greeted news with a lukewarm response. Some fear the change will taint pristine margins Apple earns on its smartphones. Investors also fear the low priced phones will cannibalize sales of its popular higher-end phones. Many of these same concerns were raised when Apple unveiled the iPad mini.
Apple aside, many believe a cheaper iPhone will have a dramatic effect on Nokia. While Nokia's Windows based smartphones have struggled to gain real traction and capture market share from either Samsung or Apple, the company still sells millions upon millions of feature phones and has seen some recent traction with its latest Lumia launches around the globe.
Apple has not made clear its intentions with the rumored low-end iPhone. However, if rumors become reality, many investors think it will spell more trouble for Nokia. With shares of Nokia up 128 percent from its 52-week low, many aren't taking any chances and locking in gains.
Apple's investors greeted news with a lukewarm response. Some fear the change will taint pristine margins Apple earns on its smartphones. Investors also fear the low priced phones will cannibalize sales of its popular higher-end phones. Many of these same concerns were raised when Apple unveiled the iPad mini.
Apple aside, many believe a cheaper iPhone will have a dramatic effect on Nokia. While Nokia's Windows based smartphones have struggled to gain real traction and capture market share from either Samsung or Apple, the company still sells millions upon millions of feature phones and has seen some recent traction with its latest Lumia launches around the globe.
Apple has not made clear its intentions with the rumored low-end iPhone. However, if rumors become reality, many investors think it will spell more trouble for Nokia. With shares of Nokia up 128 percent from its 52-week low, many aren't taking any chances and locking in gains.
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