FT Comment: Nokia is also worth waiting for it?

Time: 4/25/2010 06:56:00 PM
Nokia (Nokia)'s difficult to predict, at least not surprising. The company's past performance updated 4 times, each time leading to price fluctuations occur about 10%. Yesterday, is no exception: in the first quarter results released after a few minutes, the company is shrinking the market value of about one-seventh.

Such volatility shows significant fluctuations in the market can not predict the profitability of the Nokia situation. Management is equally so. This year has just passed and 4 months, the company has cut its forecast for operating profit margin by one percentage point, and by default they are not involved in high-end smart phone market. Nokia's operating system, as Apple (Apple) or Google (Google), which makes its high-end phone is not rare to see a substantial price reduction on the improvement.

The company constantly adjust product mix, so that it rings smart phone average selling prices fell more than 17% of shocking, is currently about 155 euros. The Apple iPhone is its 3 times the price.

Why should we worry? Smart phones worldwide mobile phone sales last year accounted for only about 15%, while Nokia still dominated the developing countries - and Credit Suisse (Credit Suisse) predicted that by 2015, developing countries will account for the total market demand for mobile phones 70% of demand. But the high-end mobile phone is the high profits products. Over the past 5 years, Nokia's gross margin has been between 32% to 38% swing, while the gross margin for each hit the top range, are more successful in the high-end mobile phone sales the occasion.

Investors have been very difficult to remember that feeling at the time. Nokia has long been committed to the operating system reform has been delayed for several months. It has been said, the system will be modified to re-join the competition in the market quickly. At the same time, Apple and other rivals have already updated the system again. Shareholders were told: be patient. Only this was expected, but hard to feel at ease.