Nokia Could See More Downside Courtesy of Apple

The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.

NEW YORK ( Trefis) -- Nokia's ( NOK) stock held up nicely last week on the news that it will eliminate 3,500 jobs in various facilities around the world. However, this week the stock is slumping, and the main reason for this could be the upcoming Apple ( AAPL) event. In all probability, Apple could come out with a cheaper version of iPhone along with the iPhone 5. It could be an entirely new phone with different specifications or iPhone 4 and iPhone 3GS could act as a cheaper iPhone. We don't know yet for sure, and whatever the case is, Nokia is in a precarious position as emerging markets are important for Nokia and account for about 37% of our $6.65 price estimate for Nokia stock.

See our complete analysis for Nokia stock here.

We recently analyzed how a cheaper iPhone could hurt Research In Motion's ( RIMM) stock as emerging markets are the only place where RIM has experienced meaningful revenue growth in recent quarters. According to a Bloomberg report citing IDC estimates, Apple accounted for only 2.6% of India's smartphone shipments in the quarter ended June 30, trailing RIM's 15%, Samsung's 21% and Nokia's 46%.

In terms of mobile phone share in emerging markets, we expect Nokia's market share to be around 27% by the end of 2011. This goes to show that although Nokia's fortunes are declining, it still holds the edge in emerging markets like India.

Nokia has also benefited from the fact that Apple has traditionally not concentrated much in expanding its operations in emerging markets like India. However, this time situation could be different and Apple may want to gain from the large potential that emerging markets possesses.

Just to give you an idea about the emerging markets' potential, China Telecom could begin offering iPhone by the end of this year in a deal that could represent a $9 billion opportunity for Apple.

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This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.