Mobile Weekly Notes: Motorola Mobility & Icahn, Apple and Nokia Earnings

July 22nd, 2011 by Trefis Team
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MMI: Motorola Mobility logo
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Motorola Mobility

Yesterday Motorola Mobility (NYSE:MMI) stock jumped by more than 12% as Carl Icahn, Motorola’s largest shareholder, urged the company to consider splitting off its patent portfolio in order to cash in on surging interest in wireless technology. Apple (NASDAQ:AAPL) and Nokia (NYSE:NOK) announced their quarterly earnings this week in addition to a host of other tech companies. Apple earnings beat street estimates by a wide margin, and Apple’s market cap as it quickly approaching Exxon Mobil’s (NYSE:XOM) market cap as it races for the top spot. Nokia continues to struggle and it’s turn around is predicated on a successful transition with Microsoft (NASDAQ:MSFT) that will not start to bear fruit until 2012.

Motorola Mobility

The smartphone industry is getting increasingly competitive with patents playing an important role in establishing an edge over competitors. Motorola Mobility has about 17,000 granted patents and approximately 7,500 pending patent applications. [1] The recently held auction for Nortel’s patents portfolio was completed at a valuation of $4.5 billion for 6,000 patents. [2] Motorola’s overall market cap is around $7.4 billion, which shows that the market might have undervalued this company based just on the amount of patents that it holds.

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See our company analysis

Apple

Apple pleased its investors with strong earnings this week blowing away its guidance as well as consensus views on stronger than expected iPhone and iPad sales. Apple’s reported revenues of $28.6 billion was well ahead of the $23 billion that it guided previously and beat consensus estimates of around $25 billion. [3] The next trigger to Apple’s stock could be the upcoming iPhone 5 release in September and expansion into China markets – something which we have discussed in our previous notes Apple’s Stock Gets Moving if New iPhone Announced and Adding More China to iPhone Sales Gets Apple to $430.

See our company analysis

Nokia

Nokia announced its earnings yesterday, which were clearly disappointing. However, EPS came out better than consensus estimates, which caused an early rally in the stock – though it has since drifted. The company reiterated its cost cutting target of 1 billion Euros by 2013 from 5.65 billion Euros in 2010 and expects to ship Windows 7 powered phones by later this year. So though we sense some cautious optimism from some investors on its medium-term recovery, it unfortunately looks like there will be few catalysts in the coming quarter.

See our company analysis

Notes:
  1. Number of patents information mentioned in Motorola Mobility’s 2010 annual filings filed with SEC [↩]
  2. Apple Joins Microsoft, RIM in $4.5 Billion Buy of Nortel Patents, Bloomberg, July 1st, 2011 [↩]
  3. Analysts’ average revenue estimate for Apple, Yahoo Finance [↩]