Nokia Bears Fooled Again
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As I predicted yesterday, Wall Street’s Nokia perma bears turned out to be out to lunch for the second quarter in a row. Nokia beat revenue consensus by more than 200 Million euros and delivered a tiny adjusted operating profit instead of the expected loss. The share price is up 9% in Helsinki. Exactly as with 2Q12, the revenue and margin surprises were created by the powerful Asha feature phone sales in emerging markets. By far the biggest shocker in the 3Q report was the feature phone volume, which grew by 3 Million units from 2Q12 to 3Q12. The slick new UI and the app quality of the Asha range is clearly a step above what the third-tier brands are able to deliver in the sub-100 euro category. Nokia is making gains particularly in 60-90 euro bracket – and that is why Nokia’s overall feature phone ASP did not decline from 3Q11 level. That was a major surprise for investors.