Nokia Lays Out Plans to Woo ‘Smartphone Virgins’
Nokia (NYSE:NOK) unveiled two smartphones recently, christened ‘Lumia’ and ‘Asha’, based on Microsoft’s (NASDAQ:MSFT) Windows platform and announced that they will be available in Europe and Asia from this month onwards and in the U.S. starting early next year. [1] Looking at the phenomenal iPhone 4S sales, we believe that the company is probably trying to avoid a direct confrontation with Apple (NASDAQ:AAPL) during the holiday season in the U.S. Nokia has lost more than 60 billion euros ($85 billion) in market value since Apple Inc. introduced the iPhone in 2007, and it will be interesting to see how Nokia fares in what promises to be an interesting tussle with both Apple and Google (NASDAQ:GOOG).
See our complete analysis for Nokia stock hereThe Finnish company has significant experience selling mobile phones in the emerging markets which contributes to around 36% of its stock value, more than any other market. This is why it makes sense that the company leverage its brand value and understanding of these markets to roll out its products in familiar territory first, work out the inevitable bugs and then push into the carrier-dominated U.S. markets.
Giving an insight into the company’s strategy in the states, its U.S. head, Chris Weber, said that Nokia is working towards creating a relationship with the network operators that doesn’t eat into their Apple and Android sales.
The company sees an opportunity among first time smartphone purchasers, a user group that is intimidated by technology and hence not prone to download a lot of apps. [2] The Windows-based phones that Nokia will be selling already integrate a lot of the most commonly used apps in its operating system and Nokia is trying to push its smartphone prices down (Asha is a low-end smartphone), two ways in which Nokia plans might work in winning over smartphone virgins.
Our $7 price estimate for Nokia stock is now about 5% below market price.
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- Nokia press release, October 26th, 2011 [↩]
- Nokia’s U.S. Plan: Target First Time Smartphone Users, WSJ, Oct 2011 [↩]