Nokia (NYSE:NOK), which competes with Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM), and Motorola (NYSE:MOT) in the mobile phone market, generates almost four times more value from emerging markets like China, India, Brazil compared to developed markets (US, Canada, UK, France, Germany).
We estimate that Emerging Markets accounts for 72% of the $26 Trefis Price estimate for Nokia’ stock, while Developed markets constitute only 19% of the Trefis price estimate.
Below we highlight the two factors that make emerging markets more valuable than developed markets for Nokia.
1. Higher Nokia Market Share in Emerging Markets Compared to Developed Markets
We expect Nokia market share of 43% in emerging markets in 2010 compared to 27% Nokia market share in developed Markets.
We believe Nokia will continue to lose share in emerging markets as well as developed markets in the future due to increasing smartphone competition from Apple and RIM.
You can modify the forecasts below to see how Nokia’s stock will be impacted if the shares for the emerging markets and developed markets were to increase rather than decrease as we forecast.
2. Greater Mobile Phone Demand in Emerging Markets Compared to Developed Markets
We expect the number of mobile phones sold to reach 840 million for emerging markets in 2010 compared to 460 million for developed markets in 2010.
We expect mobile phone sales in developed markets to grow at a slower rate compared to emerging markets.
You can modify our forecasts above to see how Nokia’s stock will be impacted based on how market share, and market size will trend in the future.
For additional analysis and forecasts, here is our complete model for Nokia’s stock.
