Nokia Goes Under

Nokia ( NOK) has enjoyed some optimism recently, as sales of the Nokia Lumia 920 extend a lifeline to the struggling Finnish handset maker.

Nokia is working to bring the new device to a multitude of carriers, including China Mobile ( CHL), the world's largest. But once Apple is firmly entrenched around the world with its iPhone 5 and Samsung offers its latest and greatest, it may be curtains for the Finns.

Nokia has a heavy debt load and has been trying to cut costs, but cutting can only get you so far. If sales of the Lumia 920 and other offerings remain "mixed," as Canaccord Genuity analyst Michael Walkley put it recently in an analyst note, Nokia may have to use more of its net cash to survive. Walkley says Nokia will have "roughly ¿2.5B in net cash exiting 2013, and this is lower than the ¿3.6B in net cash currently on the balance sheet due to restructuring cash payment estimates and our expectations for ongoing operating losses that will also adversely impact the cash balance."

Nokia could sell its strong patent portfolio to stave off the inevitable a little while longer, along with other assets such as Navteq, but I believe 2013 will prove to be an incredibly difficult year for Nokia, as it continues to lose market share.

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