Buy Nokia (NOK)
You sure can’t say Nokia (NOK) isn’t pulling out all the stops to win back market share.
The company has announced that its U.S. retailer AT&T (T) will start selling its Lumia 900 smartphone, running Microsoft’s (MSFT) Windows Phone operating system, for $99.99 on April 8. That pushes the price (with a two-year contract) to half of the cheapest iPhone and Android phones.
On March 28 Nokia announced that starting in early April its Lumia 800C will be available from China Telecom (CHA). In the second quarter the company’s Lumia 900, 800, 710, and 610 models will be sold by China Unicom (CHU). A phone for China Mobile (CHL) is still in the works.
At the end of February Nokia made its first ever appearance at the annual Mobile World Conference in Barcelona where the company introduced six new phones built on its new Microsoft Windows Phone operating system. Not bad for the first year of the company’s new partnership.
Does all of this mean Nokia is back?
No way. At least not in 2012. The company is still bleeding market share in both the high-end smartphone market and in the mid-level feature phone market. The company’s share of the smartphone market could fall to 6% by mid-2012 from an already depressed 12% at the end of 2011. Operating margins are still falling and revenue is forecast to decline again in 2012.
But there are signs that new CEO Stephen Elop could see his strategy stabilize market share in 2013 with about 13% of the global smartphone market. That’s not enough to make Apple (AAPL) or Samsung quake in their boots or to restore Nokia’s stock to the $14.21 it sold for on April 6, 2010 or the $34.51 of November 6, 2007), but I can see $7.80 a share in a year. That would be a 44% gain from the March 29 price of $5.42.
Which is why I’m adding Nokia to my Jubak’s Picks portfolio today, March 30 http://jubakpicks.com/the-jubak-picks/
Why does Nokia stand a chance of recouping even that much of the market and its share price? Read more
Apple’s shares start to recover from their earnings miss–but I’m still in bargain-hunting mode
Could today mark the turn for Apple (AAPL)? Apple shares are up 2.3% today, November 15, as of 2:45 p.m. New York time. An up day has been unusual for the stock ever since it fell short of analyst expectations when it announced earnings for the fiscal fourth quarter (that ended on September 24) on October 18. But today the shares have advanced on reports of October retail sales that show solid growth in sales of consumer electronics. And that has raised hopes for holiday sales of electronics—including the iPhone and the iPad.
Even with today’s gain the shares are down 8.2% since the October 18 high at $422.24.
I think it’s too soon to say that Apple shares are headed straight up from here. A stock doesn’t shake off its first earnings miss in six years quite that easily. I think Apple still has to prove that last quarter was a fluke by reporting stronger than expected earnings for the fourth quarter.
But I think we’re seeing the beginning of the retreat of the pessimism that has surrounded the shares ever since the death of Steve Jobs.
The molehill problem in third quarter earnings—that Apple had sold fewer iPhones than projected probably because the new iPhone 4S had cannibalized sales of older models—has somehow turned into a mountain that Apple shares haven’t been able to climb. Read more
Verizon gets the iPhone tomorrow (probably), but who gets the profits?
Verizon (VZ) and Apple (AAPL) will hold a press conference tomorrow to announce, everybody on Earth and the inner planets believes, that Verizon will start selling the iPhone in February 2011.
The big question, though, is price. Will Verizon subsidize iPhone sales to the same degree that AT&T (T) does now? If so Verizon is looking at big sales in 2011 but a substantial ding to earnings. If not, Apple will either see its huge margins on the iPhone, estimated by some Wall Street analysts at 60%, reduced or Verizon will wind up selling the iPhone at a price that makes it much less competitive with phones based on Google’s (GOOG) Android operating system.
The answer to that question depends on which company, Apple or Verizon, turns out to have been most anxious.
Apple badly needs another selling outlet besides AT&T. That company’s network has been slowed by the huge amount of bandwidth iPhone users consume to the point that the slow speed of service has cut into iPhone sales. (And in some cities, the AT&T network has been inadequate, users like my New-York-City-based partner Bob say, from the beginning.) Add in price cuts from Android-based phone makers and Android-based phones that have closed the “coolness” gap with the iPhone, and it’s really not surprising that Android-based phones grabbed 26% of the smart phone market in November, according to ComScore MobiLens, to the iPhone’s 25%. (Android’s share is coming largely at the expense of Research in Motion’s Blackberry, which saw its share drop to 33.5% in November from 37.6% in October.)
But Verizon needs the iPhone perhaps even more than Apple needs Verizon. Every month that AT&T is the sole outlet for the iPhone means another month where Verizon adds fewer customers than its big rival. In the third quarter, according to All Things Digital, Verizon had fewer than 3 million smart phone activations while iPhone activations exceeded 5 million. Verizon is spending billions to upgrade its network and the company can’t afford to fall behind AT&T in market share.
I think Verizon was the more anxious of the two companies. Read more
The other war between Apple and Google
There are two fronts in the increasingly bitter war being fought between Apple (AAPL) and Google (GOOG). And while the contest between the iPhone and Google’s Nexus One (and other Android phones) is getting most of the ink, it’s the apps battle that comes with the biggest stakes. Read more
Update Qualcomm (QCOM)
One chip in. One chip not quite in but closer. Between the two maybe this stock has finally achieved some upside momentum.
Two big announcements in the tech world with Qualcomm (QCOM) near the center of both. Read more
