Wednesday, August 22, 2012

Nokia Corporation (NYSE:NOK)’s Basic Phones are Still Profitable

Nokia Corporation (ADR)(NYSE:NOK) may have lost the plot to Apple Inc.(NASDAQ:AAPL) and Samsung in smartphones segment, but where basic feature phones are concerned it still rules.

While Finnish handset maker is working overtime to stay in contention in the high-end, fast growing smartphone sector it is still devoting time and resources to the basic products from its stable.

The company has raised its share in this segment to 35 percent in the last quarter, the highest in two years.

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It has been adding more features to its modestly-priced Asha range of handsets such as games and faster web-browsing to create a loyal customer-base.

Nokia sells more than 70 million low-priced handsets every quarter and these are phones that are sustaining its revenues. While the smartphone division is responsible for the company’s losses over the last five quarters, the basic phone unit is profitable.

Nokia sells 7 cheaper phones for every one smartphone sold by it and this division has brought in revenues worth $2.86 billion in the last quarter.

Most first-time users of mobile phones usually opt for Nokia because of its ease of use and navigability.

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Shares in the company have risen two-third since July 19, when it announced its second quarter results and on Wednesday its shares were further up 4.3 percent at $2.88 in New York.

Nokia is all set to fight back against Samsung and Apple with the imminent release of its new smartphone on September 5, partnering with Microsoft for its operating software.

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