Nokia is Winning in This Huge Market
As investors express concern and earnings reports show lackluster sales, Nokia (NYSE:NOK) is struggling to put a positive spin on everything. However, after hearing some positive news out of the East, the Finland-based phone manufacturer offered a reason for shareholders to celebrate — the Lumia 520 may be a bona fide hit among Chinese consumers.
Analysts were unimpressed by the Q1 earnings report coming out of Nokia’s camp late this week. U.S. sales took a harsh 33 percent dip compared to its 2012 numbers, while Lumia phones also dropped off in the crucial North American market. Yet Nokia wanted to remind the world that Lumia was becoming a big seller and it had, in fact, increased its marquee phone’s sales to 5.6 million for Q1 (up from 4 million in last year’s final quarter).
The pessimists call this numbers-pumping in a variety of ways, chief among them the idea that Lumia’s discount line was artificially boosting the phone’s performance. Still, the Lumia 520, which features Microsoft’s (NASDAQ:MSFT) Windows 8, does have legitimate appeal in China. Reports of the item selling out in numerous locations in China — coupled with thousands of positive reviews online — tell many that Nokia is “winning” in this very large market…
Nonetheless, Nokia has experienced hard times this year on trading floors. Its stock tumbled 12 percent by week’s end and is already down over 22 percent since the beginning of 2013. It appears investors are hesitant (to say the least) about believing in Nokia’s future as it puts some of its eggs in Microsoft’s basket and others in a second important place: patents.
In fact, Nokia was racking up countless patents in its boom years, which marked the company as an innovator, as well as one committed to protecting its intellectual property. These days, licensing deals with big players like Apple (NASDAQ:AAPL) and BlackBerry (NASDAQ:BBRY) contribute to Nokia’s revenue stream in a big way. If you’re worried about our phones, Nokia is suggesting, just check out our patents. While that might not be enough to keep the company strong for the long-term, there still is plenty of room for Nokia stock to rise.
Here’s how Nokia, Microsoft, Apple and Blackberry all finished trading on Monday: