Nokia's been stumbling badly recently. Despite leading the cell phone world for decades, the giant seemed to have messed up planning for the smartphone future. Now some analysts think its future is brighter and have bumped up their Nokia predictions.
Both Morgan Stanley and Merrill Lynch now think the company is on the up, and have revised their advice on Nokia's stock. ML's Andrew Griffen noted he thinks Nokia's earnings have "now troughed" (they're now on the upswing) and MS's Patrick Sandaert explained his new thinking is driven by "strong order intake from operators at a lower discount than feared." Both analysts pointed the finger at Nokia's recent and upcoming smartphones as a major cause of their optimism since a successful smartphone on the market could reverse the worrying downwards trend in the average price of Nokia's phones over the last several years combined with falling share of the smartphone market. Together these were taken as a strong indicator of a company with a future that was fast petering out.
Though Nokia's low-end cell phone sales still keep the company atop the overall global phone market, the Finnish company was caught snoozing by the iPhone-driven touchscreen smartphone revolution. It was slow to stir in the intervening years, and more recently Android has emerged as a huge challenger to Nokia. Combined, Apple and Google seemed to have sewn up the smartphone game just as it was emerged that the future of all cell phones was to become smart. Nokia's own efforts weren't overly well received, and lacked some of the tech and pizazz that its competition has. It caused serious financial guys to worry about the company's future, despite its huge income and large expenditure on research. We won't even mention the odd, desperate-seeming, entry into the netbook game.
The new excitement is being driven by the N8, Nokia's 12-megapixel camera-toting answer to the influential iPhone and the Android army. Despite some initial nervousness about the N8 online, centering on its supposedly poor performance and OS, the mood has now changed. Unlike Nokia's other phones, which frequently exhibit a lack of the sort of panache that we've come to associate with the market thanks to Apple, the N8 even looks like the premium device it's intended to be. It's due soon, and Morgan Stanley even pips its projected sales at 10,000 units a week in the U.K. alone.
Nokia's N8 success is still contingent on the device arriving at a post-carrier-subsidy price that matches or beats the iPhone or top-end Androids, and having a UI (Symbian 3) that instantly pleases the browsing consumer who's trying out cell phones in-store.
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