Nokia (NOK) - Get Report watchers, mindful of a dispiriting sales shortfall trend, will tune in Thursday morning to see if the Finnish wireless giant can finally break out of its funk.

First-quarter earnings won't be the only attraction, however. The world's top handset maker is expected to offer investors fresh clues on how its fancy phones are selling in the face of an onslaught of the ever-smarter devices engineered by the likes of

Samsung

,

Sanyo

,

SonyEricsson

and No. 2 rival

Motorola

(MOT)

.

The company may also provide an update on its third attempt to crack the fast-growing code division multiple access, or CDMA, market in North America and India. Early reports from some of Nokia's top chip suppliers, including

Texas Instruments

(TXN) - Get Report

, suggest that Nokia is at last starting to ramp up on phone production in what has become the leading wireless standard in this country.

As always, the stakes are high for Nokia shareholders, as tech fans field mixed signals from the sector's bellwethers. Tuesday evening's reports from the likes of

Microsoft

(MSFT) - Get Report

,

Intel

(INTC) - Get Report

and Motorola set the stage for a Thursday morning wireless stock slugfest. On Tuesday, Nokia rose 11 cents, to $14.96.

Cool Spring

That's not to say expectations are sky-high. Only last month, Nokia cut its earnings projections to 18 cents a share, forecasting a slight dip in year-over-year sales growth. The company's new guidance was colored by network infrastructure spending cuts by phone companies and the added costs of new handset development.

But foremost among the challenges Nokia and the rest of the wireless industry face is the shocking slowdown in subscriber growth, as large markets such as Europe and North America approach cell phone saturation. Last year, for example, U.S. outfits such as

Sprint PCS

(PCS)

and

Cingular

rang up their

first-ever subscriber losses, as years of runaway growth suddenly stopped in their tracks when cancellations began to outnumber new customers.

As CIBC World Markets analyst Cannon Carr showed in a recent research report, the wireless industry's gangbuster growth era now appears entirely in the rearview mirror.

Snail's Pace Now?
Charting the wireless S-curve

Source: CIBC World Markets

CDMA Showdown

Still, there's always hope. Nokia hopes its latest efforts to do an end-run around

Qualcomm

(QCOM) - Get Report

on CDMA technology will prove fruitful as it tries to tap the other half of the U.S. market. But several analysts say they view the move as merely another attempt by the handset king to force Qualcomm to lower its chip prices, rather than go it alone on the tricky technology.

"The streak is definitely over, but this is not heroic," says one New York hedge fund manager who is long Nokia. "If they guide for 5%

year-over-year growth in the second quarter, it's only because they've dropped so far.

"The real test is how well they deal with falling prices," continues the money manager. "If they can improve their margin leverage, it will be key to their valuation."