Wil microsoft buy Nokia Mobile in Q4 2011 ? My bet is yes.
(Reproduced from the Wall Street Journal)
By ARILD MOEN (June 1st, 2011)
HELSINKI—Shares in Nokia Oyj fell further Wednesday as analysts slashed forecasts amid concerns that the world's largest handset maker may struggle to pull off a turnaround quickly enough to halt the continuing decline in its market share.
Finland-based Nokia warned Tuesday of an unexpected slump in handset prices and volumes in Europe and China and analysts voiced concerns that there could be worse to come for the company, which has been struggling to maintain its position in a competitive marketplace.
Nokia Corp. denied Wednesday that it is in talks to sell its core handset business to Microsoft Corp., dismissing market speculation that had moved its stock price. Marcelo Prince reports.
Royal Bank of Scotland said Nokia is only just starting to feel the effect of strong competition from Google Inc.'s Android operating system in emerging markets. The bank said the launch of low-cost Android models from Asian rivals could further dent Nokia's profitability, and it isn't convinced that Nokia's switch to Microsoft Corp.'s Windows operating system later this year will substantially improve gross margin.
RBS lowered its target price on Nokia shares to €4.50 from €5.25 and retained its sell rating. Goldman Sachs also cut its target price and downgraded the stock to neutral from buy, voicing concerns the rapid loss of market share threatens Nokia's distribution advantage and could make it harder for the company to regain market share when it launches Windows phones.
The Finnish Federation of Professional and Managerial Staff, which represents more than 10,000 Nokia employees in Finland, also voiced its concern. "Frankly speaking, we are worried about Nokia's future," said spokesman Ari Aberg. He said he doesn't expect further staff redundancies as a result of the profit warning, but added that "it all depends on Nokia's partnership with Microsoft. If that doesn't succeed then I don't know." Nokia has already said it will cut its global workforce by 4,000 by the end of 2012 as part of its cost-cutting plans.
The company's shares were down 4.8% at €4.52 by late Wednesday in Europe, after falling 18% on Tuesday.
Nokia said in February it was planning to adopt the Windows operating platform in place of its own Symbian platform in an attempt to compete with rivals such as Apple Inc. and Google, whose phones and operating platforms have proved more popular than Nokia's, especially in the lucrative smartphone market.
Android's share of the smartphone market increased to 36% in the first quarter from 9.6% a year earlier, according to research firm Gartner. Nokia's Symbian platform saw its market share drop to 27.4% from 44.2%, while Nokia's share of the total mobile-handset market fell to 25.1% from 30.6%.
But Nokia isn't launching the first Windows phone until the fourth quarter, and expects 2011 and 2012 to be transition years, before sales of its handsets based on the Windows platform start to pick up.
Analysts are concerned, however, that those sales may come too late and there is little that the company can do in the meantime to halt its decline.
Read more: http://online.wsj.com/article/SB10001424052702303657404576359230836473332.html#ixzz1OQiX1MLz