Watch List: Nokia Corporation (ADR) (NYSE:NOK), Research In Motion Ltd (NASDAQ:BBRY)
Finnish handset maker Nokia Corporation (ADR)(NYSE:NOK) would be paying $2.2 billion for buying out Siemens AG in their network equipment joint venture. This deal would bring some respite to the company which has been struggling in its smartphone business. This would also allow the company to have complete control over Nokia Siemens Networks (NSN) at a lesser price than expected.
According to analysts, this event would define Nokia’s future no matter what happens to the smartphones business.
The company fell behind Samsung and Apple in the smartphone race and had decided to make a move to Microsoft’s untried Windows software in 2011. On the contrary to its smartphone business, the NSN turned profitable in 2012 after trimming costs as well as focusing on fourth-generation Long Term Evolution (LTE) networks. The adjusted earnings before interest and taxes (EBIT) aggregated to 196 million euros in Q1 of the year.
Nokia CEO Stephen Elop said that NSN has established its leadership. Siemens and Nokia formed a JV in April 2007 and the agreement got over in April. The company’s cash position would be 2-2.5 billion euros if the NSN deal had closed in that quarter.
Die-hard Research In Motion Ltd(NASDAQ:BBRY) fans now doubt the smartphone maker after its disappointed results for the sale of its touchscreen phones. The company stocks fell by over 28 percent recently, biggest in over a decade, after the company reported phone shipment and profit which missed analysts’ estimates.
There are various risks pertaining to BlackBerry’s credibility amongst analysts, consumers as well as corporate customers. Wells Fargo Securities analyst Maynard Um reduced the rating to hold.
The fall may also lead to developers staying away from the platform. Some analysts also viewed the Z10 demand as a dud. The company’s products have failed to attract customers vis-à-vis the popoularity of iPhone or devices running Android. The company’s subscriber base fell by over 4 million in the previous quarter.
Tags: Nokia Corporation (ADR) (NYSE:NOK), Research In Motion Ltd (NASDAQ:BBRY)