Nokia Juices Email War

Nokia posted strong third-quarter profits, but sales of 12.9 billion euros missed analysts' target of 13.6 billion euros. And though the company shipped 111.7 million phones in the quarter, 1.7 million more than expected, the average selling price per phone fell at an alarming rate to 82 euros, nearly 10% below Wall Street's expectations for 89 euros.

Nokia executives, on the conference call with analysts, gave assurances that the company is still "taking profitable market share" as it slugs it out with low-price rivals in new growth markets like China, India, Indonesia and Africa.

But the plunging phone prices renew concerns that mobile phone makers are merely following the same path as PC makers. Critics fear that slashing costs and cutthroat pricing makes for a messy battlefield with only pyrrhic victories.

Fans of the new strategy say the move will pay off for the stock as analysts start to modify their view of Nokia as more of a service seller. "I think you'll start to see it in the multiple," says one Nokia investor, referring to analysts' calculation of the price of the stock related to its projected earnings.

Nokia shares rose $1.33 to $37.86 in midmorning trading Thursday.