1/30/2008 12:30:00 PM
Nokia leaves other manufacturers behind
Nokia, in contrast to Motorola, unveiled a superb set of results, revealing that it has exceeded 40% market share and convincing pundits that it is now far out in front of other manufacturers.
Nokia’s strong presence in the fast-growing developing market, and its ability to sell high-margin handsets in the developed markets, allowed it to increase profits by 46%.
Richard Windsor from Nomura Research said: ‘They will not sacrifice margin to get volume. Any time prices come under threat you will see them retreat. They have an unassailable lead over other manufacturers for the next two years. For the rest it’s about the battle for second and third place, not mounting the challenge to Nokia.
‘It doesn’t matter what measure you take, Nokia is out in front. Its position is unassailable for one to two years; that’s why we have upgraded its stock to buy.’
Many analysts believe that Nokia’s strength and Motorola’s weakness
will suit Samsung best. ‘Samsung will do very well in the current situation. It has the chance to turn into a strong number two,’ Windsor said.
During 2007, Nokia made a major strategy shift to transform itself into a content company with the purchase of sat nav company Navteq, and the unveiling of its unlimited music offering and its Ovi mobile internet service.
During the final quarter of the year, the Nokia N95 shipped six million units and was the biggest revenue generator for the manufacturer.
Its other high-profile handset, the N81, didn’t do as well as expected, which may be the result of some operators’ reluctance to offer the Ovi handset. Nokia shipped a total of 133.5 million handsets during 4Q.