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Telecom & Wireless

Nokia (NOK) Loses Stock Market Derby Of Wireless Firms

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By Douglas A. McIntyre Updated Published
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Nokia (NOK) is by far the largest handset company in the world with a market share of 38%. It is strange that since the beginning of the year its stock has underperformed RIM (RIMM), which is up 100%; Apple (AAPL), which is higher by 70%, and even lowly Motorola (MOT),which has jumped 45% despite the fact that it is losing money and market share at an alarming rate.

Nokia’s stock is flat since the beginning of January.

Nokia has launched its own line of smartphones to compete with the iPhone and Blackberry. The flagship product, the N97, has gotten modestly good reviews. Nokia certainly has leverage with carriers since it is the primary supplier to most large cellular companies in every region of the world and has been gaining market share in the US.

The Wall St. concern about Nokia is not that it will fail to get its piece of the smartphone pie. Investors are worried that the Nokia line of products will continue to be dominated by the inexpensive, low margin phones that it sells in the developing and underdeveloped parts of the world. Nokia’s handset volume is so large that even a successful line of smartphones and a large software app stock to challenge Apple’s cannot make up for the price pressure at the low end of its product line, pressure that is being exerted by Samsung and LG.

Nokia could even pass Apple in the smartphone race. It is not a big enough business to substantially change Nokia’s margins.

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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