Nokia Corporation ADRNOK

Morningstar Rating

Stock Research and Analysis

by Joseph Beaulieu

Nokia still dominates the global mobile phone business, but its grip appears to be loosening. Although we still think the firm has two key competitive advantages that form the basis of a narrow economic moat and will allow it to reap substantial economic Read more

Bulls Say

Nokia's advantages in the wireless handset market, including massive scale and extremely broad distribution, will be difficult for competitors to match over the long run. These advantages should apply to all segments of the market, but especially at the low end.

Nokia is looking to leverage its massive installed base of wireless phones by offering new handset-based Internet services via its Ovi platform. These services, such as music and messaging, could drive strong growth in the coming years and help the firm defend its position in the handset market.

Nokia Siemens Networks has struggled as the carriers cut back on spending, but the firm has done a great job of growing services revenue. For example, the unit recently won a landmark network management outsourcing contract with Embarq EQ. Read more

Bears Say

Nokia is losing ground in the smartphone market and has shown no sign of sorting out its operating system or application store roadmaps. We think both of these are key to developing a smartphone platform that will resonate with consumers in the same way that the iPhone and BlackBerry platforms have.

Nokia's aggressive plunge into handset-based Internet services illustrates the challenges the firm faces over the long run. Consumers will increasingly look for devices that seamlessly integrate numerous communications and computing functions, with basic hardware more of a commodity.

Nokia Siemens Networks faces an uphill battle as it attempts to cut costs and restructure in the current environment. Read more

Strategy

Nokia has developed or acquired several technologies over the past few years, hoping to capitalize on the convergence of traditional wireless calling, messaging, Internet access, media consumption, and Read more

Management

Nokia's management team includes several executives with deep experience at the company. CEO Olli-Pekka Kallasvuo began his career with Nokia in 1980 as corporate counsel. Since then, his tour of duty has included various operational and functional Read more

Profile

Nokia is the world's largest manufacturer of mobile devices and a leader in mobile network equipment and software. The company's mobile phones provide consumers with experiences Read more

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