Nokia (NOK) Results Beat Expectations, But Loses Market Share

For the first time in over 10 years, the global market share of Nokia (NYSE:NOK) dropped below 30 percent, even as the company beat analysts' expectations for the latest quarter.

Net profit for the quarter fell from euro5 million to euro344 million ($499 million) from the same quarter last year. Revenue grew 9 percent to euro10.40 billion.

Revenue and earnings beat estimates, giving the company shares a boost in earlier trading, although it has pulled back on weaker guidance associated with the transformation to Windows Phone 7 (NASDAQ:MSFT) and effects of the earthquake in Japan, which will impact the performance of the company in the current quarter because of parts shortages.

Nokia sold 24 million smartphones in the quarter, a 13 percent increase over 2010, but its market share for the devices fell to 24 percent from 39 percent last year, according to Strategy Analytics market research.

Nokia sold 108.5 million devices in the first quarter, above the Strategy Analytics estimate of 105 million, and the average selling price of its handsets continued its growth to euro65, from euro62 a year earlier, indicating it is selling more top, expensive models.

"Volumes were better than expected and pricing was stronger," said Neil Mawston, an analyst at Strategy Analytics . "But it's clear that competition is still tough."

This is actually better news than most realize, as the market is growing for smartphones and basic mobile phones, and even if Nokia drops in market share, it is gaining by growing along with the overall market.

So to lose market share isn't that relevant for them, it's how they're growing along with the expanding market.

Competition will continue to be tough from Google Android (NASDAQ:GOOG), Apple iPhone's (NASDAQ:AAPL) and Blackberry's (NASDAQ:RIMM). But if Nokia responds as they should, it'll make them a better company and competitor over the long haul.

If Nokia can keep up this type of performance until they release significant volumes of smartphones based on Windows Phone 7, and those phones sell well, the company will surprise a lot of people.

Nokia was trading at $8.60, gaining $0.01, or 0.06 percent, as of 1:41 PM EDT.

Intel (INTC) (DELL) (HPQ) Pressured on PC Slowdown

The slowdown in PC sales has arrived sooner than expected, pushing the share price of Intel (NASDAQ:INTC), Dell (NASDAQ:DELL) and Hewlett-Packard (NYSE:HPQ) down on the day.

Intel was downgraded by Roth Capital to "Neutral," citing slow progress with tablets and smartphones, along with PC sales slowing down.

Reports from IDC and Gartner saying that PC sales unexpectedly dropped was another pressure on the sector, although in this case it probably wasn't from increased tablet sales, but economic concerns.

Hewlett-Packard was trading at $40.17, falling $0.96, or 2.33 percent, as of 1:56 PM EDT. Dell was trading at $14.90, dropping $0.52, or 3.34 percent. Intel was at $19.48, down $0.30, or 1.52 percent.

Microsoft (MSFT) Windows Growth at an End?

Microsoft (NASDAQ:MSFT) Windows may have come to an end in this cycle, according to investor Roger McNamee, who said in an interview with CNBC, "I think Microsoft Windows, this is the cycle where it stops growing."

"The availability of iPads (NASDAQ:AAPL) and smartphones is allowing corporations to trade down and eliminate the thousand dollars per year of supporting a Windows desktop. And this is the year where windows has fallen below 50% of Internet connected device down from 97% a few years ago," he added.

There are so many disruptions in the sector happening at such a fast pace that I think it's far too early to write off Microsoft in the category, although Windows is under pressure, there could be a lot of software play left in Microsoft in the changing environment.

This battle is really just beginning, but there's no doubt Microsoft will have to answer the Windows challenge to meet the revenue and earnings of the past.

Microsoft was trading at $25.28, falling $0.36, or 1.39 percent, as of 1:40 PM EDT.

Nokia (NOK) Offers New Symbian Smartphones

Today Nokia (NYSE:NOK) launched the first smartphones to be used with its updated Symbian software, called the E6 and X7.

Enhanced features include a longer battery life, faster browser, and new icons. Text input has also been improved and new Oiv Maps applications added, which have better search and pubic tranport routes with it.

The Nokia X7 is made more for consumers interacting with entertainment, coming with a 4-inch display. The Nokia E6 focuses more on corporate customers, and includes a QWERTY keypad and high resolution touch display.

Nokia added the new, faster Symbian software, dubbed Symbian Anna, will be available for previously released top models, including the N8, E7, C7 and C6-01 devices "in coming months."

Nokia was trading at $8.73, falling $0.30, or 3.32 percent, as of 12:33 PM EDT.

Smartphones Leaders (GOOG) (AAPL) (MSFT) (NOK) (RIMM) by 2012

Google's (NASDAQ:GOOG) Android will soar to become an even more dominant force with smartphone by 2012, according to a report from Gartner, which sees them controlling about 50 percent of the smartphone market by then.

Smartphone users with Android platforms in 2012 will reach 310,088 million, based on Gartner estimates. That would account for 49.2 percent of the smartphone market.

This year Android should surge to about 38.5 percent of the market, after controlling about 22.7 percent of the market, Gartner said.

Microsoft is increasingly considered a dark horse in the smartphone race, increasing from a 4.2 market share in 2010 to 19.5 percent by 2015. Estimated users would jump to close to 216 million with that share. That will be driven by the partnership with Nokia (NYSE:NOK).

For Nokia, its Symbian platform is expected to drop to only 661 thousand users by 2015, a 0.1 percent market share. In 2010 it was the market leader with 37.6 percent.

Apple (NASDAQ:AAPL) will remain somewhat level, increasing from 15.7 percent in 2010 to 17.2 percent in 2015. Gartner said it believes Apple will peak in 2011, when it reaches 90.56 million users.

Research In Motion (NASDAQ:RIMM) is projected to fall from 16 percent in 2010 to 11.1 percent by 2015. That would represent 122.86 million users.

In 2011 Gartner predicts smartphone sales will soar 57.7 percent over 2010, reaching 486 million units sold.

Nokia (NOK), Apple (AAPL) Patent Battle Part of New Smartphone Business

The new realities in the extraordinarily lucrative smartphone business is the use of patents as a legal tool, as evidenced in the battle between Nokia (NYSE:NOK) and Apple NASDAQ:AAPL).

Paul Melin, Nokia's vice president of intellectual property, recently stated, "We treat intellectual property as a business here at Nokia. For us this dispute with Apple is nothing extraordinary, just an instance where one company has refused to pay its fair share for the use of technology we've contributed. ... We have started legal proceedings to enforce our legal rights on our intellectual property in order to get proper compensation, that's the gist of it."

"Apple put the building blocs that were largely built on Nokia's and others technologies together to a very high-end product initially, and then those products have reached a little bit lower price points," Melin added. "Some of Nokia's patents in suit against Apple originate from the mid-90s and describes the key features that you see in the iPhone."

Normally companies ultimately settle these types of cases, and usually those with less patents pay out to the larger holder, which in this case is Nokia.

There would also be licensing deals included in any type of settlement.

Nokia closed Tuesday at $8.77, gaining $0.05, or 0.57 percent. Apple closed at $338.89, dropping 2.30, or 0.67 percent.

Sprint (S) Beats AT&T (T), Verizon (VZ) to Tap-And-Go

Needing every edge it can get, Sprint Nextel Corp. (NYSE:S) said it will implement what is called a tap-and-go system which empowers customer to make purchases with their mobile phones, beating out similar initiatives from T-Mobile, Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T).

The new technology dubbed near-field communication, or NFC, allows customers to wave their smartphones in front of an electronic reader in a store, or tap them, which then registers the transaction.

If Sprint can get this out quick enough to get a significant lead, they would definitely attract a number of new users who would consider it a must-have feature.

“We intend to make this an open solution where consumers can use their phone in a variety of physical locations,” said Kevin McGinnis, vice president of product platforms.. “Because we’re allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint.”

Sprint closed Monday at $4.62, gaining $0.06, or 1.32 percent.

Google (GOOG) Opens Nortel Patent Bid at $900 Million

In an auction for the giant patent portfolio held by Nortel, Google (NASDAQ:GOOG) offer the first bid volley at $900 million. Competitors like Nokia (NYSE:NOK) and Apple (NASDAQ:AAPL) are looking at entering into the bidding process as well.

Via an order from a bankruptcy court, Nortel has been ordered to divest of its patent holdings, which are estimated to number at about 6,000, including patent applications as well as patents already awarded.

Google has stated, as well as others, that they're interested in acquiring patents in order to help battle an endless number of patent infringement lawsuits which are also costly to defend against.

Expectations are it'll probably take much more than this to secure the patents, depending on the players and how deep their pockets are.

Micron Technology (MU) Looks Strong on DRAM Prices

Saying it appears the fallout from the earthquake in Japan in the chip industry will continue to put upward pressure on DRMA chip prices, which should benefit Micron, Sterne Agee chip analyst Vijay Rakesh said he's maintaining a "Buy" rating on the company.

DRAM spot prices are already up 5 percent to 7 percent in the quarter and could go higher, says Rakesh.

Some manufacturers such as Rexchip and Powerchip could find their supply of wafers shrinking dramatically, as “Japanese OEMs are cutting out some of these arrangements,” which under normal conditions had been supplied up front by the companies, with payment coming after DRAM production.

With smartphone and tablet sales continuing to soar, that is another factor which could have a strong impact on the supply of wafers.

Micron closed Thursday at $11.47, falling $0.11, or 0.95 percent.

Cirrus Logic (CRUS) Too Reliant on Apple (AAPL)?

As Apple (NASDAQ:AAPL) goes so goes Cirrus Logic (NASDAQ:CRUS), and that generates the question of the sustainability of the company if it doesn't expand its market.

The problem isn't so much whether or not Apple will continue to enjoy success in the smartphone market for some time, the question is whether or not Cirrus will continue to remain the primary vendor they work with there, as evidenced by Apple's recent decision to use Qualcomm (NASDAQ:QCOM) instead of Infineon for its baseboard chip.

Cirrus' design does help protect is some, as it comes with strong customization, but those specs could be imitated or adapted easy enough if Apple chose another company.

With about 54 percent of the revenue generated by Cirrus coming from Apple, they do need to do some work to lower its exposure and boost investor confidence.

That's not to say there aren't some other wins for Cirrus, as they have won business with Ford Motor (NYSE:F) and Sirius (NASDAQ:SIRI) for unrelated products, but together with other offerings, is still less than half of the business they do with Apple alone.

Cirrus closed Wednesday at $21.11, falling $0.23, or 1.08 percent.

Nvidia (NVDA) Pressured on PC, Tablet, Smartphone Worries

Confidence in Nvidia (NASDAQ:NVDA) continues to waver as expectations PC demand will continue to fall and the weak presence the company has in the tablet and smartphone segments.

If the concern over the PC market ends up being true and penetration in the tablet and smartphone market continues to be a challenge, Nvidia is definitely in trouble.

A major hope for the company is its contract wins with smartphones in regard to its Tegra Chip. One negative there is the possibility the release of Motorola's Bionic (MMI) will be delayed; the reason shares fell on Wednesday.

Some analysts see the need for Apple (NASDAQ:AAPL) to redesign its iPhones and ipads with better chips, which would position Nvidia strongly in that area, but that's not here nor there, and it could be a long time before that happens, if it ever does.

As far as the here and now, Nvidia has some major hurdles to overcome before confidence in the company is renewed. Some more wins in the smartphone sector is probably the best bet in the near term.

Nvidia closed Wednesday at $18.45, dropping $0.72, or 3.76 percent.

Nvidia (NVDA) Faces Challenges from PC Slowdown Says ThinkEquity

Shares of Nvidia (NASDAQ:NVDA) are under pressure today on the warning from ThinkEquity analyst Krishna Shankar that the company will probably be hurt by declining PC consumer demand.

Although Shankar acknowledges strong growth for Nvidia in the smartphone and tablets market, it apparently won't be enough to offset the projected decline in PC sales.

With smartphones and tablets outside of Apple (NASDAQ:AAPL), he also pointed to the heated competition from rivals like Marvell (NASDAQ:MRVL), Texas Instruments (NYSE:TXN), Qualcomm (NASDAQ:QCOM), Intel (NASDAQ:INTC) and Broadcom (NASDAQ:BRCM).

He added that “slowing consumer PC market growth may be worsened by supply bottlenecks due to the Japan earthquake.”

Concerning ARM-based PC and server chips, revenue from those segments is probably still a couple of years away, Shankar concluded.

Hew lowered his EPS estimate for fiscal year 2012 from $1.18 to $1.10, and for full year 2012 from $1.35 to $1.20.

Shankar maintains a "Hold" rating on Nvidia, which was trading at $18.45, dropping $0.72, or 3.76 percent. He slashed his price target on Nvidia from $24 to $18.

Qualcomm’s (QCOM) Still A Good Buy

With the growing demand for 3G devices, such as eBook readers, smartphones and tablets, Qualcomm (NASDAQ:QCOM) is strongly positioned to take advantage of the strong sector going forward.

Revenue was up about 25 percent and EPS was about 10 percent above analysts' estimates, with expectations they'll continue to perform in that range or better, as guidance was boosted by the company.

The cash position of Qualcomm adds to the strength of their financials, with over $19 billion on hand. There is also no long-term debt the company holds, making them even more attractive.

Those looking for continual increases in dividends like this, as it portends for future dividend growth, as the company has raised its dividend every year since 2003, showing the durability of the company during a number of difficult years.

Qualcomm closed Monday at $52.18, down $0.57, or 1.08 percent.

Nokia (NYSE:NOK) Gets Goldman (GS) Love, Jumps 4 Percent

Saying pessimism over Nokia (NYSE:NOK) may have bottomed out, Goldman Sachs (NYSE:GS) analyst Tim Boddy gave the company a rating boost, resulting in shares of the company jumping over 4 percent. He sees it as an attractive entry point for the company.

Boddy said he considers the stock priced as if it were a struggling auto company, which in his opinion is an excessive response.

While he believes the global share of mobile phones by Nokia will be cut by about 50 percent, he believes the company will rebound once the hit bottom sometime in the middle of 2012.

The catalyst will be the partnership they have with Microsoft (NASDAQ:MSFT) in Boddy's view, which Nokia will benefit from their business connections. He also sees them benefiting from "cloud services."

Saying the stock is priced at 6.4 times enterprise value as a multiple of Ebitda, and 0.4 times sales, based on 2011’s estimates — multiples that assume the company will see its share of the total “value” of smartphones cut in half, to 10%, and assumptions are there will only a 3% Ebit margin on handsets.

That’s excessive, according to Boddy. More than likely, Nokia can maintain “mid-teens” share of cellphone value, on a percentage basis, and a “high single digit” overall handset Ebit.

Nokia was trading at $8.68, gaining $0.32, or 3.89 percent, as of 12:20 PM EDT. They've dropped off from a high of $8.80 earlier in the session.




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Research in Motion (RIMM) Sales 14.9 Million Smartphones in Q4

Research in Motion (NASDAQ: RIMM) had a decent quarter but was punished in after-hours trading on disappointing guidance.

Revenue in the fourth quarter came in at $5.56 billion, or $1.78 a share. Analysts had been looking for $5.64 billion in revenue and $1.76 a share.

The good news was the company sold 14.9 million BlackBerry smartphones, toward the top of its projected range. Gross profit beat at 44.2 percent of sales, surpassing the 43.6 percent reported in the fiscal third quarter.

Going forward, guidance was weak, with RIM projecting $5.2 billion to $5.6 billion in revenue and EPS of $1.47 to $1.55. Analysts have been looking for $5.64 billion and EPS of $1.65.

Investors didn't seem to be impressed with full year guidance ending February of 2012, where RIM sees EPS “in excess of” $7.50, well above the average of $6.81, after the guidance offered for the first quarter.

Research in Motion closed at $64.09, gaining $1.97, or 3.17 percent. In after-hours trading, as of 5 PM EDT, the company was getting punished, losing $6.72, or 10.48 percent.

Best Buy (BBY) Slimming Down to Fighting Size

Best Buy's (NYSE:BBY) net income in the fourth quarter plummeted 16 percent as higher-cost items didn't sell, such as notebook computers and flat-screen TVs.

In response, Best Buy said they're going to focus on growth categories like smartphones and tablet computers, while also opening smaller and leaner stores as part of their future strategy.

Worries about its ability to deal with tanking TV sales combined with a muted outlook for fiscal 2012 to send Best Buy's stock down $1.69, or 5.3 percent, to $30.16 in late day trading.

Fourth-quarter net income fell to $651 million, or $1.62 per share, from $779 million, or $1.82 per share.

Best Buy has been restructuring its international operations, particularly in China, and cutting costs in its U.S. supply chain. Excluding costs for those moves, net income totaled $1.98 per share. That beat the $1.84 analysts expected, according to FactSet.

Revenue edged down 2 percent to $16.26 billion. U.S. revenue fell 4 percent to $12.1 billion, while international revenue rose 4 percent to $4.1 billion.

Best Buy closed Thursday at $30.13, falling $1.72, or 5.40 percent.




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Nokia (NOK) Working on Windows (MSFT) Nokia Phones Says Elop

Nokia (NYSE:NOK) Chief Executive Officer Stephen Elop said the mobile phone giant has already started to develop a smartphone which will use Microsoft's (NASDAQ:MSFT) Windows Phone 7 as a platform.

Elop also shot down the idea that Microsoft was interested in acquiring the company. "I'm not aware of a strategic interest that Microsoft would have in the rest of the business," Elop said.

"To the extent that a partnership has been formed around what they're really interested in, then what would an acquisition bring other than a good year of anti-trust investigation, huge turmoil, delays?"

Close to half of Nokia's mobile phone revenues come from more basic mobile phones, which are popular in emerging markets. The company has struggled to establish its brand in the United States, especially since Apple (NASDAQ:AAPL) launched its iPhone.




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Arm Holdings (ARMH) Challenging Intel (INTC) with Smartphone Chips

There's one advantage relative upstart Arm Holdings (NASDAQ:ARMH) has on chip giant Intel Corp. (NASDAQ:INTC) in the smartphone segment, and that is battery life.

Since that's the name of the game for smartphones, Arm has a foothold in the fastest growing segment of the chip market, with Intel and others scrambling to catch up.

ARM Holdings PLC, is a British microprocessor firm founded 21 years ago in a turkey barn. While still relatively small, ARM is upending the chip business, posing perhaps the most nettlesome challenge yet to giant Intel Corp, says the Wall Street Journal.

"ARM's chips have become the most popular standard for cellphones and tablets and are found in hundreds of millions of other devices, from digital cameras to disk drives. Its market share in handsets is more than 90%, and its stock has tripled over the past 15 months.

"ARM's growing cachet—and the threat it poses to Intel—was on display March 2, when Apple CEO Steve Jobs presented the iPad 2 to journalists and technophiles. He emphasized how the tablet's processor—which is based on ARM technology—is twice as fast as the previous one, all the while keeping battery life at an impressive 10 hours."

Arm Holdings closed Wednesday at $24.40, down $0.52, or 2.09 percent. Intel closed at $19.81, falling $0.37, or 1.85 percent.

Apple (AAPL) Tops in Smartphone Revenue

Even though Apple (Nasdaq:AAPL) is far behind market leader Nokia (NYSE:NOK) in global market share for smartphones, they are the leader in revenue generated for smartphones in 2010, according to a report from research firm Strategy Analytics.

"Apple commanded just 16% of the world's smartphone market volume in 2010, Strategy Analytics said, but took in the lion's share of revenue - 29% of all smartphone revenue. Apple shipped roughly 46 million iPhones during 2010; the company charges roughly $600 for its iPhone 4 - putting the iPhone's selling price at the very high end of the market," noted Motley Fool.

"Nokia, which ended the year with 34% smartphone market share, captured 20% of 2010 smartphone revenues, and Research In Motion (Nasdaq:RIMM), which had 16.7% share, took in 15% of smartphone revenues. Combined, the three biggest firms generated 64% of all smartphone revenues."

The research firm predicted that Google (Nasdaq: GOOG) Android smartphone sales will grow significantly in 2011, with players such as ZTE and Huawei crowding in with the likes of Samsung and HTC, particularly at the lower end of the market.

With the smartphone market still wide open and a lot of time to pass before the winners in the narrative emerge, there is already pressure on Apple in pricing, as Google enlarges its position with growing Android sales, which are lower in price and margins, but growing in numbers.

The global economy will be a big part of this story, as it continues to teeter, and appears to be worse than politicians around the world are willing to admit.

In that case, price will become a factor, and it could gravitate toward being more of a commodity sector, which would hurt Apple the most.

Apple was trading at $330.73, down $14.70, or 4.26 percent, as of 2:38 PM EDT. Google was at $557.63, falling $11.93, or 2.09 percent. Nokia was down to $7.90, dropping $0.16, or 1.99 percent.

Verizon (VZ) Readies 1st 4G Smartphone for Release

Verizon Wireless (NYSE:VZ) announced it is ready to start selling its first 4G smartphone, the HTC Corp. ThunderBolt. The consumer-friendly phone will be offered for sale on Thursday on the fast mobile network of the company.

The Thunderbolt will sell for $249.99 with a two-year contract. Despite hints of a new pricing structure for Verizon's fourth-generation wireless service, the smartphone can be purchased with a standard monthly voice plan starting at $39.99 and unlimited data at $29.99.

Verizon Wireless is racing to catch up with Sprint (NYSE:S) in 4G phones.

The Thunderbolt marks the first product on Verizon's 4G network with mass appeal, important as the carrier looks to drive users onto its new network. While Verizon's 4G network has been running since late last year, the company previously only sold laptop air cards that often are used by corporate travelers. Such 4G services offer a faster connection than more widely available third-generation services.





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