This issue regarding hardware upgrades occurs in other platforms. For example, I used to have an Apple iPhone 4 with iOS4 and a lot of Apps required the upgrade to iOS5. Then, when I upgraded to iOS5 the Siri Service was not available. In addition, the iOS5 cause the iPhone4 to be very slow. Worst than that, an iPhone 4 with iOS6 is almost a joke. In fact, you do not often see an iPhones 3G or iPhone 3GS. Based on my research, the situation is the same with Android.
This season 2013 has been great for a lot of teams. However, Team NOK has been a real disappointment. Notwithstanding the above, the season is early. There is no crying in baseball.
Sentiment: Strong Buy
Just the facts. The average Price to Sales of Telecommunications Equipment is 1.50 such as ERIC with 1.18. But, you may prefer NFLX with P/S of 2.83 meaning you pay $180 for $65 of Revenues or AMZN with P/S of 1.95 meaning you pay $262 for $135 of Revenues. When AAPL was at $700 the P/S was above 4.00 and now AAPL is at $440 with P/S of 2.45. The easy money is found in extremely undervalued companies such as NOK, BBRY, HPQ and SNE.
Total Cash of $13 Billion and Total Debt of $7.25 Billion. Total Cash per Share of $3.54 and Net Cash per Share of $1.56. Price to Sales of .31 and Price to Book of 1.16. At this level, each Share represents more than $10 of Revenues. Wow!
The final numbers of 2012 for Units Delivered (Not Sold) according to Strategy Analytics
Total Volume of Handsets - 1.6 Billion Units Worldwide:
Samsung Total Volume - 400 Million Units
Nokia Total Volume - 336 Million Units
Apple Total Volume - 135 Million Units
Smartphones - 700 Million Worldwide
Samsung Smartphones - 213 Million
Apple Smartphones - 135 Million
Nokia Smartphones - 35 Million
Non-Smartphones - 900 Million Worldwide
Nokia Non-Smartphones - 301 Million
Samsung Non-Smartphones - 187 Million
Apple Non-Smartphones - 0
NOKIA ASHA v. SAMSUNG REX - The Verdict in India
The Nokia Asha series of feature phones is available in the price bracket of Rs 2,500 to Rs 6,500 and in comparison to it the Samsung Rex series will be available from the last week of February in the price range of Rs 4,280 to Rs 6,490.
Here, Nokia definitely has the upper hand because for most entry-level phone users price is a major deciding factor for making the buying decision.
The company is also planning to bring more Lumia models at even lower price points. "We are working closely with Microsoft to offer Nokia Lumia devices at newer price points, thereby offering the Windows Phone and Lumia experience to newer consumers," says Mehrotra.
Another blow was dealt to Samsung with the launch of Apple's iPhone 5 in November. Apple has been pushing its products through attractive bundled as well as monthly instalment offers, which have helped the company double its market share to about two per cent in December from less than one per cent (estimated) in July, according to a recent study by an independent market research firm. Apple also fuelled growth by cutting price of its earlier versions of the iPhone models to push sales. In value terms, too, Apple's share has doubled to 6.7 per cent in December 2012 from 3.3 per cent in July.
Amid this, Indian players like Micromax, Karbonn and Lava, among others, have also emerged as serious contenders by playing the price game and meeting the aspirational needs of the Indian consumers.
Says S N Rai, chairman of Lava Mobiles: "The urban market has begun responding to Indian brands, earlier there was a perception issue. But using international reference designs to make smartphones has helped us in attracting buyers."
The share of domestic manufacturers in the Indian smartphone market was at 17 per cent of the total handset sales in 2012, estimated at 17 million, and is growing at about 80 per cent per annum. The domestic brands, mentioned as "others" in the study, saw their market share (by volume) rise from 4.2 per cent in July to 12.1 per cent in December 2012.
While Samsung declined to comment on the market share, Asim Warsi, vice-president, Samsung Mobile, says: "We are confident we will further consolidate our value leadership in the overall Mobile as well as the smartphone segment"
TO BE CONTINUED...
FICTION - NOKIA ASHA IS KILLING THE G-REX
Sounak Mitra | New Delhi March 11, 2013 Last Updated at 23:30 IST
Samsung banks on Rex to rev up sales
Last month, Samsung launched a new smartphone, Rex, to complement its high-end Galaxy series in a bid to regain the market share that it has been steadily losing in the Indian market.
Samsung, though still the market leader, has been fighting competition from local Indian manufacturers such as Micromax, Karbonn and Lava on one border and foreign players like Apple and Nokia on another.
Its market share in value terms fell from 47.4 per cent in July to 43.3 per cent in December last year, according to a recent market study by a research firm. In volume terms, too, its share slid from 46.4 per cent in July to 35.8 per cent in December.
The foremost challenger to Samsung has been the Finnish mobile phone manufacturer, Nokia. Its Asha series of smartphones launched last year was quick to upset the market balance. During the fourth quarter of 2012, Nokia sold 16 million Asha phones globally. In India, the Asha 305, priced at Rs 5,029, became the best-selling model during the period. The company is banking on its Asha series to fire up sales at the bottom of the pyramid, and plans to launch two more models in the entry segment soon.
However, opinion is divided on whether Asha phones can truly qualify as a smartphone. Many believe that the Asha series is a feature-packed phone that falls short of being a smartphone and, therefore, should not be clubbed with other smartphones when arriving at the market share of various players.
Nokia, meanwhile, is also pushing its Lumia series of phones. "In a little over a year, we have introduced 10 Lumia devices, each at a new price point, each delivering an uncompromised Lumia experience. Of these, eight are already in the market," says Vipul Mehrotra, director (smart devices), Nokia India.
TO BE CONTINUED...
Nokia Revenues for 4Q/12 of 8.07B should be in Euros, while Analysts Revenue Estimates for 1Q/13 of 8.70B in Yahoo are in US Dollars.
Based on recent developments, particularly the suggested business plans for BBRY to the effect that maintaining a 3.5% to 5% market share is the goal, it appears that MSFT and NOK will be the third ecosystem. At this moment size matters - MSFT and NOK are heavy weights. In addition, INTEL will be joining the alliance.
The time for NOK is now, since the price action at other industry players is almost completed considering that NFLX is above $180 (up 250% in 6 months) and BBRY is above $14 (up 100% in 6 months). In addition, the action at HPQ, DELL and SNE is very positive. Even AAPL at $460 is up more than 1,000% in 10 years.
Here’s the full text of what Nokia had to say on the matter:
Our agreement with Microsoft includes platform support payments from Microsoft to us as well as software royalty payments from us to Microsoft. Under the terms of the agreement governing the platform support payments, the amount of each quarterly platform support payment is USD 250 million.
We have a competitive software royalty structure, which includes annual minimum software royalty commitments that vary over the life of the agreement. Software royalty payments, with minimum commitments are paid quarterly. Over the life of the agreement, both the platform support payments and the minimum software royalty commitments are expected to measure in the billions of US dollars. Over the life of the agreement the total amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitment payments.
As of the end of 2012, the amount of platform support payments received by Nokia has exceeded the amount of minimum software royalty commitment payments made to Microsoft, thus the net cash flows have been in our favor. As a result, the remaining minimum software royalty commitment payments are expected to exceed the remaining platform support payments by a total of approximately EUR 0.5 billion over the remaining life of the agreement.
However, in 2013 the amount of the platform support payments is expected to slightly exceed the total amount of the minimum software royalty commitment payments, thus the net cash flows are still expected to be slightly in our favor.
Elop is the solution, not the problem. In particular, Elop was hired by the BOD for the transition to Windows.
My understanding is that the terms and conditions of the Agreement, for the interplay of the Microsoft Support Payments and Nokia Platform License Payments, have not been disclosed. Thus, my understanding is that it is really difficult to quantify the disclosure by Nokia, other than from a cash-flow standpoint the Agreement will be positive for Nokia in 2013.
Sentiment: Strong Buy
The current P/S of NOK (0.33) should be compared with BBRY (0.52) and HPQ (0.33). Based on HPQ, the NOK Stock Price ($3.50) should be close to the bottom, while based on BBRY the NOK Stock Price should increase from $3.50 to $5.50. Actually, BBRY was $6.80 and increased to as much as $18.00. That is equivalent to an increase of NOK from $1.70 to $4.50. Based on the above, the valuation of NOK at $1.70 was less than BBRY at $6.80. Of course, the P/S of SNE (0.19) and PC (0.18) as less than NOK, but NOK already got to such low level at $1.70. The NOK Longs expect an increase in Market Share, Sales, Revenues, Margins, and Earnings. In turn, the NOK Stock Price will increase.
NOK earned approximately $39 Billion in 2012. The increase in revenues by 8.7B euros is consistent with a projected increase of 20% to 25% in revenues.
According to Elop, the goal of NOK is to sell Smart Devices to the next 1 billion customers. NOK will be ready with GREAT PRODUCTS AT GREAT PRICES. Is really not that complicated!
Clearly, NOK is working to have the manufacturing capacity to make 100 million units per year of Smart Devices, including the Lumia - Windows Phones and Asha. For example, NOK was selling approximately 25 million Smart Devices just 2 years ago. In fact, NOK sold approximately 22 million Symbian in 2012, more than 1 year after the "burning platform" memo. If the Windows Phones and Symbian are combined, NOK sold more than 32 million units in 2012. In addition, the Asha sold approximately 9 million units in 4q 2012.