Some of the analyst commentary this morning was downright harsh.
Some of the quotes surrounding Nokia today:
Jefferies analyst Lee Simpson
Nokia looks like “a low-margin box maker rather than a firm returning to its strident past.” He adds that the warning “highlights the precarious nature of trading product cycles” in Nokia. “Those who were long Nokia have been playing a trade around the Lumia product family and any prospective Win8 devices [tablets] in the 2012 second half,” he writes. “This is now over given that this warning clearly shows that uptake of new devices has been far from sufficient to offset suffering elsewhere. An expensive (media costs?) Lumia launch coincides with all-out retreat in the Symbian category and now a marked painful market share erosion across Asian domains for the lower-end mobile devices.”
Nomura Securities analyst Stuart Jeffrey
He sees “a continued risk that Q2 proves weaker than even the new guidance implies. Moreover, unless new feature phone models are an instant hit, there is risk that Q3 will see another leg down in earnings.” The perverse upside: the smaller revenue from Symbian gets, the less the risk of further downside surprise.
Bernstein Research analyst Pierre Ferragu
The feature phone market is simply “disappearing” under the pressure from low-end Android phones. The low end of Nokia’s product line, he writes, is basically empty. “Nokia is fully leveraged to the success with consumers of Windows as a mobile ecosystem,” he writes. “All our research indicates clearly that today’s consumer interest for Windows-based phones is very weak today and new Windows-based phones are generating good user satisfaction from the small number of consumers adopting them but very limited broader interest. The scenario we unfortunately find the most likely today is one in which Windows would remain an anecdotic player in mobile phones, leaving Nokia with dreadful economics. In such a scenario, we see additional downside to the stock.”
NOK is down 66 cents, or 13%, to $4.38, the lowest level since 1997.
This is hopefully temporary because it matters not just to Nokia but to Microsoft who are joined at the hip to the phone maker.
In light of the recent launch of the Nokia Lumia 900, this news couldn’t have come a worse time.
What do you think about Nokia’s troubles?
Do you think this is temporary or a sign of real structural long term trouble?