Analysts mixed on Nokia outlook ahead of earnings report

Analysts are mixed over the future prospects for troubled Nokia amidst a competitive smartphone market dominated by iOS and Android. Recent comScore surveys indicate that Android and iOS now amount to over 85% of the total market, with RIM’s BlackBerry and Microsoft’s Windows Phone struggling to break 10% of the market combined. Further, Nokia’s Windows Phone sales amounted to just 0.3% of the U.S. smartphone market in 2012, suggesting that sales of the Lumia 900 weren’t as good as expected. BlackBerry and Windows Phone are both releasing new products in the next 6-9 months that they believe will finally allow them to eat into the leaders’ market shares.

The need for a third smartphone ecosystem is there, according to a recent survey by analytics firm Credit Suisse. Credit Suisse conducted a survey on carrier sentiment for the smartphone operating system landscape, and found that 85% of carriers surveyed believe there is a need for a third platform to emerge as an alternative to Android and iOS. When it comes to which platform should ultimately win out, a full 77% of carriers surveyed felt that Microsoft’s Windows Phone platform will emerge victorious.

In response to the carrier survey, Credit Suisse changed its rating of Nokia stock from underperform to outperform, due in large part to Nokia’s key partnership with Microsoft on Windows Phone products. The company believes that Nokia will manage a recovery in 2012, due to its well made low-cost Lumia devices and a powerful Windows Phone 8 platform set to launch in a few months.

Of course, not all analysts have such a rosy outlook for Nokia, whose stock was reduced to junk status by two ratings agencies earlier this year. Research firm Bernstein on Friday reiterated its underperform rating in the Finnish company, cutting the target price for Nokia’s stock to $1.56. Nokia is currently fetching $1.80 per share in pre-market trading. Bernstein believes the crunch will be long-term for Nokia, predicting a €1.7 billion loss this year, with a net loss of €0.38 per share this year, followed by a loss of €0.09 per share next year.

We’ll know more about Nokia’s current picture on July 19th when the company reports its Q2 2012 earnings. In the meantime, Stefan put up a good post last week speculating about Nokia’s Q2 Windows Phone sales, which we suggest you check out ahead of the earnings call.

[via Barron’s, Fierce Wireless]

  • until WP8 or let me say until Nokia World, Nokia will suffer but the recovery will show soon as WP8 Lumias get to carriers

  • Lumia sells just if they dumping prices.

    Each time Windows is released in new format they say it will go well, every time it is fail

Back to top ▴