Nokia (NOK) Sticking to the Basics Should Push Shares Higher
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Smartphones? No, dumb phones are where the real money is, which is why Nokia (NYSE: NOK) could continue to see gains in its share price over the long haul.
An interesting financial blog post made Tuesday highlights two key things: 1) how well off the U.S. really is, and 2) how Nokia is still a powerhouse.
When someone says "phone," what's the first thing you think of? Probably some high-end Apple (Nasdaq: AAPL) iPhone, HTC One, or Samsung Galaxy S III, otherwise known as smartphones. (When's the last time you heard the phrase "cell phone?")
But, Nokia (NYSE: NOK) is trading higher as investors come to the realization that almost no one outside the U.S. and maybe Europe can buy, much less afford to use such a device. Something like only five percent of Chine Mobile's (NYSE: CHL) 600 million-plus subscriber base holster a smartphone, for example.
The author points out Nokia's 103 dual-band GSM cell phone (with built in flashlight and FM radio!), saying that sales of those devices should make the stock worth more than $2 per share. Priced at about €16 (or $20), there's not much room for margin. However, as Europe continues tightening, and India and China still find most residents at or just above the poverty line, Nokia will continue to thrive.
There is increasing competition from the likes of Samsung and discount players ZTE and ASUS, but Nokia is still a well-known name in many parts of the world (would you rather own a locally-made device, or one from Finland? Most would say Finland).
So, should macro economic pressures persist, Nokia might find itself in the $4, $6, or even higher price range in no time. Regardless if its upcoming Windows Phone 8 lineup is a smash hit.
Shares are up 4.8 percent Tuesday, putting Nokia on a three-session winning streak and putting the stock 52 percent ahead of where it closed at a near-term low on July 18th. (Nokia hit a multi-year low of $1.63 on the session.)
An interesting financial blog post made Tuesday highlights two key things: 1) how well off the U.S. really is, and 2) how Nokia is still a powerhouse.
When someone says "phone," what's the first thing you think of? Probably some high-end Apple (Nasdaq: AAPL) iPhone, HTC One, or Samsung Galaxy S III, otherwise known as smartphones. (When's the last time you heard the phrase "cell phone?")
But, Nokia (NYSE: NOK) is trading higher as investors come to the realization that almost no one outside the U.S. and maybe Europe can buy, much less afford to use such a device. Something like only five percent of Chine Mobile's (NYSE: CHL) 600 million-plus subscriber base holster a smartphone, for example.
The author points out Nokia's 103 dual-band GSM cell phone (with built in flashlight and FM radio!), saying that sales of those devices should make the stock worth more than $2 per share. Priced at about €16 (or $20), there's not much room for margin. However, as Europe continues tightening, and India and China still find most residents at or just above the poverty line, Nokia will continue to thrive.
There is increasing competition from the likes of Samsung and discount players ZTE and ASUS, but Nokia is still a well-known name in many parts of the world (would you rather own a locally-made device, or one from Finland? Most would say Finland).
So, should macro economic pressures persist, Nokia might find itself in the $4, $6, or even higher price range in no time. Regardless if its upcoming Windows Phone 8 lineup is a smash hit.
Shares are up 4.8 percent Tuesday, putting Nokia on a three-session winning streak and putting the stock 52 percent ahead of where it closed at a near-term low on July 18th. (Nokia hit a multi-year low of $1.63 on the session.)
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