Financial Management News Critique on Nokia
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AB1201 Financial Management News Critique | ‘Can Windows Bring Magic Back to Nokia?’ – The Business Times | | | | Randi;Yong Jin;Qin Hong;Reuben;Calvin | 10/31/2012 | |
Contents Introduction 2 Software & Hardware 2 Share Price 3 Liquidity & Solvency 4 Profitability 4 Market Efficiency 4 Conclusion 5 Appendix A – Share Price Figures 6 Appendix B - Article 7 Bibliography 10
AB1201 News Critique
‘Can Windows Bring Magic Back to Nokia?’
By Group 3: Calvin Lim, Randi Ang, Reuben Chew, Chong Yong Jin & Chia Qin Hong
Introduction
In today 's world where smartphones have become the societal norm, manufacturers such as Apple and Samsung have seen significant success in the market, taking 53.3% of worldwide market share (IDC, 2012). In contrast, Nokia has taken a battering, with its market share falling by 50.8% (IDC, 2012) and its stocks plummeting by nearly 400% from February 2011 to October 2012 (Figure 1).
The article discusses Nokia’s current financial position and its decision in adopting Windows Phone for their smartphones. Moody’s, S&P and Fitch’s have all downgraded Nokia’s stock rating; this coupled with poor financial performance, had caused Nokia’s stock prices to fall greatly. However, based on our analysis of Nokia’s prospects, we feel that its current market value is undervalued, with investors condemning Nokia’s strategy too prematurely.
Software & Hardware
The future of Nokia hinges primarily on the success of Windows Phone (Huuhtanen, 2012). Though Windows Phone 7 (WP7) has seen lacklustre adoption in the market, one should note that the newly-released WP8 had vastly improved. WP8 has none of the artificial software restrictions that plagued WP7, such as the inability to use multi-core processors (Molen, 2012) and high resolution screens (Miller, 2012). With such restrictions removed, Nokia can finally go toe-to-toe with rival brands, with innovative features of its own
AB1201 Financial Management News Critique | ‘Can Windows Bring Magic Back to Nokia?’ – The Business Times | | | | Randi;Yong Jin;Qin Hong;Reuben;Calvin | 10/31/2012 | |
Contents Introduction 2 Software & Hardware 2 Share Price 3 Liquidity & Solvency 4 Profitability 4 Market Efficiency 4 Conclusion 5 Appendix A – Share Price Figures 6 Appendix B - Article 7 Bibliography 10
AB1201 News Critique
‘Can Windows Bring Magic Back to Nokia?’
By Group 3: Calvin Lim, Randi Ang, Reuben Chew, Chong Yong Jin & Chia Qin Hong
Introduction
In today 's world where smartphones have become the societal norm, manufacturers such as Apple and Samsung have seen significant success in the market, taking 53.3% of worldwide market share (IDC, 2012). In contrast, Nokia has taken a battering, with its market share falling by 50.8% (IDC, 2012) and its stocks plummeting by nearly 400% from February 2011 to October 2012 (Figure 1).
The article discusses Nokia’s current financial position and its decision in adopting Windows Phone for their smartphones. Moody’s, S&P and Fitch’s have all downgraded Nokia’s stock rating; this coupled with poor financial performance, had caused Nokia’s stock prices to fall greatly. However, based on our analysis of Nokia’s prospects, we feel that its current market value is undervalued, with investors condemning Nokia’s strategy too prematurely.
Software & Hardware
The future of Nokia hinges primarily on the success of Windows Phone (Huuhtanen, 2012). Though Windows Phone 7 (WP7) has seen lacklustre adoption in the market, one should note that the newly-released WP8 had vastly improved. WP8 has none of the artificial software restrictions that plagued WP7, such as the inability to use multi-core processors (Molen, 2012) and high resolution screens (Miller, 2012). With such restrictions removed, Nokia can finally go toe-to-toe with rival brands, with innovative features of its own
Citations: Aleksandrov, A. (2012, October 24). Nokia issues £610 Million Bond to Raise Cash. Invezz. Retrieved October 30, 2012, from http://invezz.com/news/tech/631-nokia-issues-610-million-pounds-bond-to-raise-cash Ando, R Chopping, D. (2012, October 23). Nokia Bonds Raise Nearly $1 Billion. Wall Street Journal. Retrieved October 30, 2012, from http://online.wsj.com/article/SB10001424052970203406404578073922928419116.html CNet Asia Griffiths, D. N. (2012, April 16). Moody 's Downgrade: Nokia Responds. Forbes. Retrieved October 30, 2012, from http://www.forbes.com/sites/danielnyegriffiths/2012/04/16/moodys-nokia-responds/ Huuhtanen, M Mariano, K. D. (2012, October 11). 5 Probable Reasons of Nokia Lumia 920 Delayed Release. Retrieved October 31, 2012, from http://au.ibtimes.com/articles/393082/20121011/nokia-lumia-920-release-date-pre-order.htm Miller, M Molen, B. (2012, October 29). Windows Phone 8 review. Engadget. Retrieved October 30, 2012, from http://www.engadget.com/2012/10/29/windows-phone-8-review/ Nokia Corporation Nokia Corporation. (2012). Stock Charting. Nokia. Retrieved October 30, 2012, from http://www.nokia.com/global/about-nokia/investors/stock-tools/stock-tools/ Rasmussen, P Seeking Alpha. (2012, June 6). Nokia: It Is Time To Buy This Severely Undervalued Stock . Seeking Alpha. Retrieved October 30, 2012, from http://seekingalpha.com/article/641771-nokia-it-is-time-to-buy-this-severely-undervalued-stock Thomson Virki, T. (2012, June 15). Nokia cuts 10,000 more jobs as losses deepen. Reuters. Retrieved October 30, 2012, from http://www.reuters.com/article/2012/06/15/us-nokia-restructuring-jobs-idUSBRE85D09K20120615 -------------------------------------------- [ 3 ]. Source taken from Nokia Website (Nokia Corporation, 2012)