5 Reasons to Invest in Nokia (NOK)

By | February 8, 2013

In my previous post, Invest in Nokia (NOK), I mentioned that Nokia’s turnaround story is painting a stronger and brighter picture. In Q4 of 2012, the Finnish company has become profitable and put a stop on their negative cash flow. Nokia has made many strategic moves to restructure the company and reduce costs. Now that the balance sheet is under control, Nokia will focus on their design and innovation.  The company is now a growth story. Below are some reasons to buy Nokia.

  1. Nokia’s current flagship phone, the Nokia Lumia 920 has received high ratings and has been rated as one of the best smartphones currently in the market by reputable sites, besting in categories such as innovation, features, design, and productivity. Some of Nokia’s best features include Nokia’s 8.7 PureView camera (which is in a league of its own), Nokia Maps, Nokia Drive, Nokia City Lens, Nokia Transport, Nokia Music, Wireless Charging and more.
    Nokia Lumia 920 still rates better than the new Blackberry Z10
    in many aspects. With the support of Microsoft for the Windows 8 platform, Nokia has a better advantage than Blackberry. If two phones are identical in specs except for the operating system (OS), users would logically opt for an OS that would be more intertwined with their daily lives, which is Windows today by market share.  However, the Nokia is better in specs in many ways and having a more popular OS will certainly strengthen it’s place for a more popular phone.
  2. Nokia partners with China Mobile, the largest mobile phone business in the world, with over 700 million people using their service. This deal with China Mobile is a victory over Apple because Apple has not been successful in signing a contract with China Mobile.
  3. Nokia’s flagship phone for China Mobile, the Lumia 920T, has been very high demand in China and has been sold out in many major cities, including Beijing and Shanghai. The Lumia 920T has been well received in China and more people are looking to buy the phone. China Mobile is highly subsidizing the phone for customers who sign a two-year data plan; the charge for the Lumia 920T is only 1 Yuan (roughly $0.16). Nokia needs to ramp up production to meet the large demand.
  4. Nokia’s large portfolio of patents are winning lawsuits against competitors that try to infringe on its innovative technologies. A lawsuit against Research In Motion (BBRY) has forced BBRY to settle with Nokia with a one-time payment and on-going payments from BBRY to NOK. Nokia has won a lawsuit against Apple (AAPL) that awards Nokia a one-time payment and on-going royalties from Apple to Nokia.
  5. Nokia HERE wins over Google for a new contract with Toyota for their mapping services. Nokia HERE has also won over Google for mapping content with Ford and many other car manufacturers. Almost 80% of all cars that are bought with a per-installed navigation system use Nokia HERE.

Disclaimer: I am long Nokia because I believe in the company’s turnaround story.




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