Nokia Corp (ADR) (NOK)

tagbox (< 20) Submitted: 7/27/08 11:38 PM : Start Price: $27.00 NOK Score: -16.06

Nokia is much stronger than analysts realize. Perhaps the analysts do not recognize the value of a strong brand name, or are putting too much emphasis on the North American market.

Nokia's global market share in handsets is around 40 percent, much higher than that of any competitor. Average price of a handset is falling because of Nokia's strategy of aggressively marketing outside of developed countries. Building a strong brand name will greatly benefit Nokia when buyers of inexpensive handsets are able to afford better handsets. And it is working -- Nokia is the strongest brand name in India, not Coke or Nike.

Penetration into North American markets remains weak. Nokia has handsets that compare favorably to the iPhone and the Blackberry, but is not aggressively promoting them. When fancy handsets become commodities, Nokia will pick up all the marbles because economy of scale guarantees that Nokia will remain the low cost producer.

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