Nokia Expected to Benefit from Higher Mobile Phone Pricing

by Trefis Team
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Upside
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Market
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Trefis
NOK
Nokia
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Trefis members have created forecasts for two key drivers of Nokia’s (NYSE:NOK) stock over the last week: (1) Nokia Developed Markets Mobile Phone Prices and (2) Nokia Emerging Markets Mobile Phone Prices. These forecasts suggest that Nokia Developed Markets Mobile Phone Prices as well as Nokia Emerging Markets Mobile Phone Prices will trend slightly above estimates of the in-house team of analysts at Trefis. These projections indicate a combined upside of 9% for Nokia’s stock.

Nokia competes with other mobile phone makers Motorola (NYSE:MOT), Nokia (NYSE:NOK), Research in Motion (NASDAQ:RIMM), and Apple (NASDAQ:AAPL). We currently have a Trefis price estimate of around $12 for Nokia’s stock, about 33% above the current market price of around $9.

We estimate that Emerging Markets constitute around 53% of the Trefis price estimate for Nokia’s stock. In comparison, Developed Markets account for 17%. The stock  is quite sensitive to (1) Developed Markets Mobile Phone Prices and (2) Nokia Emerging Markets Mobile Phone Prices. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.

1. Developed Markets Mobile Phone Prices

The average of Trefis member forecasts for Developed Markets Mobile Phone Prices indicate a decrease from around Euro 88 in 2010 to Euro 70 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of a decrease from around Euro 87 in 2010 to Euro 62 by the end of the Trefis forecast period. The member estimates imply an upside of 2% to the Trefis price estimate for Nokia’s stock. In the past, Developed Markets Mobile Phone Prices has decreased from Euro 142 in 2003 to around Euro 91 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Nokia’s stock to Developed Markets Mobile Phone Prices.

Our complete analysis for Developed Markets Mobile Phone Prices is here.

2. Nokia Emerging Markets Mobile Phone Prices

The average of Trefis member forecasts for Nokia Emerging Markets Mobile Phone Prices indicate an increase from around Euro 53 in 2010 to around Euro 59 by the end of the Trefis forecast period, compared to the flat baseline Trefis estimate around Euro 51 over the Trefis forecast period. The member estimates imply an upside of 7% to the Trefis price estimate for Nokia’s stock. In the past, Nokia Emerging Markets Mobile Phone Prices has decreased from Euro 122 in 2003 to Euro 54 in 2009.

Disagree? You can drag the forecast trend-line above to express your own view, and see the sensitivity of Nokia’s stock to Nokia Emerging Markets Mobile Phone Prices.

Our complete analysis for Nokia’s stock is here.

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