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Technology Stocks : Nokia Corp. (NOK)

NOK 6.855

-4.1%

12:50 PM EST

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To: Eric L who wrote (9081)	10/29/2013 12:43:57 PM
From: Eric L	2 Recommendations Recommended By Jurgis Bekepuris zax Read Replies (1) of 9255

Tero Kuittinen Comments Today's Nokia Earnings and Questions the D&S Sale ... >> Nokia Stuns With Feature Phone Revenue And ASP Rise - Why Was The Handset Unit Sold? Tero Kuittinen Forbes 10/29/2013 forbes.com Nokia's 3Q 2013 report casts the decision to sell the handset unit in a very odd light. Not only did the smartphone unit volume grow by a remarkably healthy 19% QoQ – but Nokia also managed to grow its feature phone sales by 4% QoQ, while jacking up feature phone average sales price (ASP) by 4%. Very few analysts, if any, expected that the fading feature phone unit could be stabilized this well. The most likely motive Nokia’s board of directors had for selling the handset unit was a possible collapse of the low-end phone operations, which might have triggered a heavy cash bleed. But Nokia as a whole is edging to break-even point right now with plenty of cash in its reserves. Even before the smartphone operations hits a ten million unit quarterly run rate. Nokia’s smart devices actually showed an ASP decline of just -8% year on year, while smartphone volumes soared by 40%. That smart device ASP decline is on par with Apple . Nokia’s Lumia program has reached the point where its price erosion is similar to iPhones and better than what the iPads are now delivering. Why would Nokia’s board sell the handset division at this moment? What the heck were they thinking? Did they really get so scared of some potential future downturn in the handset division that they simply wanted to wash their hands of the entire industry? Many companies that have battled back from the actual brink of bankruptcy must be looking on this charade with real incredulity. A major handset vendor has decided to simply bail out of the consumer device industry with rising handset volumes, declining ASP erosion and no cash burn. ### - Eric -

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