Monday, September 10, 2012

Nokia Corporation (NYSE:NOK) Can Still Bank on its Feature Phones

It's still early days and we cannot write-off Nokia Corporation (ADR)(NYSE:NOK)’s new Lumias just yet, despite being widely panned by the critics and the gaffe over the misleading promotional videos.

But the Finnish handset maker has another ace up its sleeve - its feature phones that are still the mainstay of the company.

Demand from emerging markets for the affordable and multi-utility feature phones could help in the survival of the company.

Shares in Nokia, which were rising in anticipation over its smartphones before the launch, tanked on the day of the launch and has not quite recovered from it. The share price has dropped more than 36 preen so far this year.

On the other hand expectations over Apple’s iPhone 5 have driven the stock price of the Cupertino company up to record highs, making it the most valuable company in the United States.

Will NOK Bounce Back After The Recent Retreat? Find Out Here

Disregarding for the moment the fate of its Lumias, the company's feature phones are seeing a lot of traction in emerging markets such as India. This is a segment where it does not have to compete with Apple while others like Samsung  and LG which also offer lower-end phones do not quite match up to the European company's standards.

Feature phones have more capabilities than basic mobile phones but are not as capable as smartphones. 

There are countries where a significant proportion of the population do not have the infrastructure or the consumer affluence to buy smartphones. and it is in these areas where feature phones like that made by Nokia more than suffice.

As the second-biggest seller of mobile phones in the world, the Finnish company has a global franchise that can capitalize on demand for these products.

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