Though Nokia's ( NOK) sales warning caused most Wall Streeters to duck and run, some steadfast observers see Thursday's comments as a shot across the bow of its rivals.The Finnish handset king
Because Nokia handsets tend to fetch the highest prices in the market, competitors typically see lower pricing as one of their best weapons. But Nokia doesn't seem ready to concede on that front right now. "We will be competitive, we will be very competitive in trying to gain share," said Nokia CEO Jorma Ollila on a conference call with analysts Thursday. The new meaner strategy seems to have worked a bit already. Nokia managed to gain a percentage point in the market share race, claiming 39% of the world's handset market in the second quarter. "If Nokia's tactic works, they are going to force further share consolidation and drop some marginal brands out of the race," says Sagawa.
beat earnings expectations and added more than half a million new subscribers. Nextel raised its full-year earnings target to $1 per share from the 93 cents analysts polled by Multex were expecting. But given the stock's recent climb to a 52-week high Wednesday, the numbers seemed to have fallen below Wall Street's sky-high expections. As the first of the wireless companies to report earnings, investors took its lukewarm revenue number as an omen for the sector. Nextel dropped 2% Thursday, while peers like AT&T Wireless ( AWE) and Sprint PCS ( PCS) slid 5% and 2%, respectively. The telcos could use the sales boost from a hot holiday handset season, and even though Nokia is paying more for marketing, the tidings may be richer than expected. As optimists will point out, Nokia's frosty third-quarter sales guidance was based on weak U.S. dollar assumptions from the second quarter. And though it is still early, the dollar has been strengthening since then.