Nokia is Positioned for "Strong Performance" in Emerging Markets
Nokia (NYSE: NOK) is bracing itself for the next billion users.
According to Ovum analyst Angel Dobardziev, Nokia CEO Stephen Elop has "outlined a coherent vision and strategy for addressing the challenges in connecting the next billion users."
"Elop identified the three key challenges in connecting the next billion: providing affordable content and data, delivering an app economy for feature phones, and enabling effective content discovery," Dobardziev said in an e-mail today. "He then proceeded to outline how the assets Nokia has in this space fit together to address them."
Nokia's asset and patent portfolio is smaller than its chief Android competitor, Samsung. However, the company still holds one of the most impressive collections of patents.
"Ovum liked Elop's emphasis on channeling Nokia's high-end device and service expertise to deliver an affordable yet compelling Internet experience for lower income users," Dobardziev added. "This is being achieved through the use of attractively-designed, low-cost feature phones, its cloud-based browser Nokia Express, and its Nokia Life set of educational, agricultural, and entertainment services.
"Due to its considerable distribution network in emerging markets, Nokia is well placed to continue its strong performance in this space for as long as smartphones remain above the $50 mark."
Smartphones should stay above $50 for the next year or two. However, with prices dropping rapidly for both smartphones and tablets, there are bound to be manufacturers that attempt to steal sales by undercutting the competition.
This is already beginning to happen. Hewlett-Packard (NYSE: HPQ) is selling its first seven-inch Android tablet for $169. Amazon (NASDAQ: AMZN) sells the cheapest Kindle Fire for $159, while Acer plans to sell a tablet for $130.
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