3 Reasons Nokia Shares Are Recovering

Investors are growing confident in Nokia (NOK). Shares have risen sharply from a low reached in April 2013. As Nokia approaches a yearly high, there are three reasons to expect more upside in shares.

1. Lumia releases

Nokia released the Lumia 625 in June this year. The phone has a massive 4.7 inch display, powered by a dual-core Qualcomm (QCOM) Snapdragon processor. Without a contract, the phone will sell for $290 in Europe, Latin America, and Asia in the third quarter. The only downside of the phone is the low resolution (800x480).

At the premium end, the Lumia 1020 was launched, gaining positive reviews from critics.

2. Nokia Siemens acquired

Nokia simplified its ownership structure of Nokia Siemens by buying the portion it did not own. Costing $2.2 billion, Nokia will now be in a position to reduce costs at Nokia Solutions and Networks (NSN). Nokia aims to cut operating costs by EUR 1.5 billion. This is sharply higher than the original target of nearly EUR 1 billion.

3. Nokia Windows RT tablet

Nokia is rumored to be working on an RT tablet. If the speculation is correct, the device will be announced on September 26, 2013 in New York.

Microsoft (MSFT) has seen little success so far for the Surface tablet. The company wrote down its inventory last quarter. Nokia could fare better, especially if the hardware design is improved. Nokia is already known for building good-quality products.

Nokia sharply higher this year

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Compared to other mobile chip makers and network suppliers, Nokia is valued in the middle range compared to its competitors:

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Lumia still Nokia’s savior

Nokia’s Lumia is growing nicely in many emerging market countries, thanks to Microsoft. In Latin America, the Windows Phone is among the most popular - Microsoft said the system is ranked second in Peru, Mexico, and Colombia. Nokia is succeeding because it offers a broad range of Lumia devices worldwide. As consumers recognize the value proposition offered by Nokia, demand will grow.

 

Written by Chris Lau

 

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