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After six months of getting slapped around, Nokia (NOK) - Get Nokia Oyj Report is poised to strike back.

The Helsinki-based tech company, long a Wall Street favorite, lost its famous touch last holiday season. The company hemorrhaged market share in the first half of the year after its mulish insistence on selling unfashionable, blocky phones locked it out of the hottest part of the handset business.

Now, Thursday morning brings the newly flexible Finnish handset giant a chance at redemption, via second-quarter numbers. Wall Street will be watching both sales and pricing in hopes that the stock can wipe out those unhappy first-half memories.

For the second quarter, analysts are looking for earnings of 17 cents a share on $8.3 billion in sales. That represents a 4-cent drop in profits from the previous quarter, but a slight improvement to the top line. Looking ahead to the September quarter, analysts expect 4% sequential sales growth from the June quarter.

Nokia shares were down a dime to $14.21 in afternoon trading Wednesday. The stock has been mostly flat ever since the company unveiled back-to-back earnings disappointments in April.

New Trick

Investors will have no trouble recalling the phone fashion disaster that set off this spring's

flurry of warnings. Humbled, Nokia has since embraced design imitation, introducing its own color-screen flip phones just in time to catch the last of that fad. Nokia has also cut phone prices in an effort to regain lost ground. Wall Street is wondering how expensive the price war will be.

While optimists are looking to see if Nokia comes back even stronger after its big stumble, skeptics are wondering if the telecom titan may have finally met its match as



regains its footing and South Korean giant


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gathers momentum.

Nokia needs to provide evidence that its response has been effective, says one sell-side analyst who has a neutral rating on the stock.

But there is a chance that some have been too quick to write off Nokia, without considering all the big Finn's strengths.

"It's hard to ignore a player with the leading market share in a price competitive market," says the Wall Street analyst, who asked not to be named. "Nokia has great cost advantages and big pricing leverage with suppliers and manufacturers."

Pricing Pressure

Analysts say Nokia probably made good headway in its cheaper phone segment, as it cut prices on low-end models and pushed further into emerging markets. That's likely to hurt the company's much-watched average selling price, or ASP. Nokia's comments about its willingness to cut prices probably helped lower expectations for ASPs, but investors still won't be happy if the number drops more than 10%, say industry watchers.

The bigger battle is in the replacement market. Nokia has been particularly vulnerable in this midrange price zone as Motorola, Samsung,




all swiped market share. Again, fashion was the issue, as users traded in their old Nokia block phones for sleeker clamshell and slider models.

Nokia has packed cameras, radios and big color screens into its newest phones to help invigorate its lineup. The question: Did Nokia make the improvements in time to help improve its prospects, or will it take another quarter to see the results?

"Companies miss product cycles from time to time --

but they also catch them," the sell-side analyst says.