Nokia Stock On Upswing As BlackBerry Rides the Storm

Nokia Stock Price (above)

BlackBerry Stock Price

It looks like Nokia Corporation is making new Tablets and phones for 2014, according to what we read in the article below.  The stock is at near $8.00, closing at $7.94 (NYSE ADR ) while BlackBerry (BBRY on NASDAQ) has been coasting at $6.50, where it bottomed September, 2012. That BlackBerry has been at near $6.50 for ten days may well mean that it will only go up from here. Here’s the story on Nokia:

Nokia Corporation (ADR) (NYSE:NOK) is going to launch new handsets in 2014

“Boston, MA, 11/13/2013 (wallstreetpr) – The new handsets and tablets belonging to Nokia Corporation (ADR) (NYSE:NOK) are going to be much faster and unique as compared to the present models available in the market. After Nokia Lumia 1520, the management of the Nokia Corporation announced that they are going to launch Lumia 2020 and Lumia 1820. According to the information made available from Nokia Power House, the Nokia Lumia 1820 is going to be thin, metallic uni body and lytro style. This handset of Nokia Corporation is going to be launched at the MWC 2014. This phone is also imaged to be the next Nokia Corporation’s flagship device.

Much information has not been made available related to the Nokia Lumia 1820, but there are rumors that this phone is going to be the first Microsoft smart phone. Microsoft Corporation is going to unveil their first smart phone with the help of Lumia series and this handset is also rumored to be the first Nokia Corporations handset without having the Nokia brand name on it.

Talking about the Nokia Lumia 2020, it is going to set a new name for the 8 inch tablets available in the market. This tablet of Nokia Corporation would be having 800 snap dragons processor in it and would also be having 1080 resolution display. The Nokia Lumia 2020 would be faster as compared to the Lumia 2520. It will have higher PPI display and will be available with stylus support.

The arrival of the Nokia Lumia 1080 p is also expected from the company in the near future. Moreover, Nokia Corporation has launched their first tablet known as Lumia 2520.

Talking about the trading sessions of Nokia Corporation, the estimations made available by Market Watch, the stock of shares of Nokia Corporation has an average price target of $7.47 with a consensus holding of hold.”

Source: http://wallstreetpr.com/nokia-corporation-adr-nysenok-is-going-to-launch-new-handsets-in-2014-12453

The golden parachute that Mr. Heins will receive if there is a change of control at BlackBerry

There was little incentive for the executives at BlacKberry to have allowed OS 10 to succeed, I predicted this on this Blog in another post.  Just like Leo Apotheker, who destroyed the WebOS launch for HP, Heins has had little incentive to watch OS 10 succeed.  I am sure he has tried, but in the face of the steep challenges, is he/has he loosing/lost his resolve? Let’s look at a previous** analysis:

With RIM/Blackberry certainly taking on the appearance of a company painfully circling the white porcelain bowl, I thought that the time was right to take a look at how the company’s CEO, Thorsten Heins was compensated in 2013 and how he will benefit from a change in ownership, a scenario that is extremely likely with the announcement of the signing of a letter of intent with Prem Watsa’s Fairfax Financial Holdings.

Mr. Heins took over as President and CEO in January 2012 after serving as Chief Operating Officer of Product Engineering.  Interestingly, according to the 2013 Proxy Statement, Mr. Heins received 85.15 percent approval of the company’s shareholders with a significant 14.85 percent of shareholders withholding their votes, the only way that shareholders of Canadian companies can express dissatisfaction with a Board Member.

Let’s start by looking at Mr. Heins’ compensation (and that of the other Named Executive Officers or NEOs) for 2013 and the previous two years to put things into perspective:

 

Mr. Heins’ base salary was $1,000,974 and he also received long-term incentive awards (LTIP) totalling $6,190,833 in “recognition of his outstanding performance in Fiscal 2013.”. His LTIP consists of 381,679 shares at a grant price of $7.86 (restricted stock units) and 763,358 shares at a grant price of $7.86 (stock options) as shown on this chart:

Including Mr. Heins’ non-equity annual incentive payment (AIP) of $1,717,295 (172 percent of his annual base salary), granted because he exceeded targets set by the Board , his total compensation package for fiscal 2013 was $9,065,077, down from $10,274,324 in fiscal 2012. Poor fellow indeed.  I do find all of this compensation information fascinating given that this is what happened to both net income and the value of the company’s handset sales over the past three years:

Now, let’s get to the meat of the matter, the golden parachute that Mr. Heins will receive if there is a change of control of the company.  If Mr. Heins is terminated before or within 24 months following a change of control, he will receive:

1.) A lump sum equal to twice his annual base salary (currently $1,000,974).

2.) Contributions to continue all non-equity benefits including extended health and dental coverage for 24 months.

3.) An annual incentive amount equal to two times base salary multiplied by the current AIP target percentage.  Based on the current base salary AIP target of 1.5, the payment would be $4.5 million.

4.) All stock options and RSUs are immediately vested and can be exercised over the next year or the applicable time remaining on the grant agreement, whichever is shorter.

5.) If the termination date occurs before the Grant Date, the company will pay Mr. Heins $33.75 million.

Apparently, there are very strong personal reasons why the current executive team would be looking for a change in control since all of the NEOs have similar agreements.

Now, for comparison’s sake, let’s see how the company compensated the “sweaty masses” that were turfed in 2012.  The company’s “2012 Cost Optimization Program” that saw the layoffs of approximately 2000 employees or 10 percent of the total workforce cost the company $125 million on a pre-tax basis in fiscal 2012.  During 2013, the company made cash payments of $10 million to terminated employees and paid an additional $24 million toward facilities costs.

I realize that this isn’t directly related to the subject of this posting but, as a Blackberry owner that had my first phone crash within the first week that I owned it, I found this information interesting noting that the numbers are in millions of dollars:

 

Basically, since fiscal 2011, Blackberry has spent $1.816 billion settling warranty issues on their products.  While I don’t have comparable data from other smartphone manufacturers, that may explain some of the issues facing the company.

Lastly, if you want to see who got screwed in this whole debacle, this graph explains it all in a nutshell:

 

Shareholders saw an investment of $100 in March 2008 plummet to a value of $12.77 in March 2013 at the same time as total Named Executive Officer compensation rose from $15,544,628 to $25,044,614. Granted, from 2012 to 2013, NEO compensation dropped from just under $31.7 million to its current level, but that’s small compensation for the company’s much beleaguered shareholders.

Once the market sees a company as weak and vulnerable, perception becomes reality and there is very little chance of recovery.  Such is the case for RIM/Blackberry and this year’s rebranding did nothing to change the company’s plunging fortunes. Fortunately, for the company’s NEOs, they get paid handsomely either way.  Unfortunately, long-term shareholders do not.

** source:http://viableopposition.blogspot.ca/2013/09/blackberry-who-benefits-from-control.html

In Mid July 18% of BlackBerry Users Were In Indonesia

by Fernando Commodari, Ph.D.

English speaking Asia includes Indonesia, with over 238 million people, the world’s fourth most populous country. The nation’s capital of Jakarta has near 11 million people inhabiting the NW coast of Java. Indonesia shares a border with Malaysia. Other English speaking countries near to Indonesia are, Singapore, the Philippines and Australia.

That 15 million of the 80 million users of BlackBerry devices to  July of 2013 were in Indonesia speaks volumes on the need for BlackBerry to have produced another OS 7 device using BBM on the BlackBerry BIS NOC (free BBM’ing where data plans are expensive sells!). The company needs to keep this user base and compete with cheap Asha devices from the former Nokia and Android devices from China and elsewhere. The region is key to BlackBerry surviving, especially with the erosion of the North American markets and loss of sales.  Until BlackBerry can correct things in North America, it needs to sustain growth or reach a steady-state equilibrium, in emerging markets. The regrowth of the market in North America  won’t happen over night. As South East Asia or Oceania gets cheaper data networks from carriers and as BBM migrates cross platform, with richer features on BlackBerry devices, while introducing iOS and Android users to the OS 10 UI, this region will be ripe for OS 10 devices in a few years. The vision for the BlackBerry Board needs to be broad and long term, while not getting caught up in the negative hype. Those of us who have been long on BlackBerry know that this ride is not for those who get car sick! There is a future for the newest cell phone OS, and BlackBerry can reap profits from the tech it is sowing today, if it stays the course, makes corrections where needed, and executes more effectively and with better market research and marketing.  I’m not sure that going private is the best course, certainly not for the share holders at the $9 per share that Fairfax is offering.  The negative media and analyst pressures serve a purpose to help in this correction, if painful.

 

Check out a related post:

BBRY One Year Later:

https://pfcsystems.wordpress.com/2013/10/02/bbry-one-year-later/

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Microsoft Set To Buy Nokia’s Cell Phone Division

Microsoft and Nokia ink a deal that will see the Windows giant buy the finish company’s cell phone division for 7.2 billion dollars.

Battery Best Bets!

As cell phone screens get larger and allow for more vivid colorful displays and become more prominent as all consuming devices, the battery requirements are critical. I have posted in the past on how to prime and improve your chemical cell that runs your handheld.  In the above graph, we see that my Dev Alpha A discharges to 0% charge in 13 hours, with good use, at a charge loss rate of about 8% per hour.

Recharging of the Battery; charging the Dev Alpha A with the PlayBook charger or with the charger that came with the device, proceeded at a rate of about 1.25% charged per minute. (Please, be safe and use the charger that came with the device!) This means that the battery should charge fully in 60 to 70 minutes:

Discharging images with time stamp as Battery Lover goes from green (good charge) to orange (caution, consider charging) to red (must charge!):

Here is an added bonus to help train your electrochemical cell:

Steps to Train your phone–Use Battery Lover as Battery Watch will drain the phone:

1)Let the phone discharge to near zero (10 to 15% of full charge) 2 times, then turn it off w the button on top–don’t swipe it on:

2)Connect, disconnect and reconnect the phone to the charger and make sure you see the not charging “red” symbol and the charging

“thunderbolt” symbols. Let the phone charge uninterrupted in off mode, you should see the flashing LED until it becomes a static “green”

It should take about an hour to reach full charge; but leaving it to charge beyond that time–over night is ok or for as long as you can.

3)After the initial two near zero discharges, charge the phone at near/below 30%. Test your phone, with The Battery Lover App, as needed.

4)If you find that the phone still discharges to zero in a short period; repeat the process from near zero charge, and next time let it discharge to

near/below 20 %. Test the phone again, as needed.

5)If you find that the phone still discharges to zero in a short period; repeat the process from near zero charge, and next time let it discharge to

near/below 10-15 %. Test the phone again, as needed.

6)Repeat 5 as needed with decreasing by 5% the level to discharge! Do so until your phone lasts unplugged for at least 8 hours!

Ideally, you should reach the sweet spot where you have 8 hours of use and are still between 30 to 50% charge.

At this point you most likely should charge the phone while in the “orange”.  Definitely charge it in the “red” at or below 20% charged!Other Cell Phone Battery Tips: A Little Chemistry is Good:Training Your Li Battery to Power Your (Z10) Cell Phone With More Muscle https://pfcsystems.wordpress.com/2013/03/06/a-little-chemistry-is-goodtraining-your-li-battery-to-power-your-z10-cell-phone-with-more-muscle/ Some Thoughts on Optimizing BlackBerry 10 (and Any) Cell Phone Battery Performance https://pfcsystems.wordpress.com/2013/03/05/some-thoughts-on-optimizing-blackberry-10-cell-phone-battery-performance/ Follow us on Twitter: Follow @FernCommodari Follow @PFCSystemsInc Like us on facebook: facebook.com/PfcSystemsInc http://www.pfcsystems.com Info@pfcsystems.com Download the “PFCSystems” app on BlackBerry World: http://appworld.blackberry.com/webstore/content/24419891/?countrycode=US BBM Channel, PIN C0007F38F.   Copyright 2013 (logo/sm, since 1993), all rights reserved, all content on this site! Photos may not be used without explicit permission, in writing, from PFC Systems, Inc.

So What is Nokia Up To at The High End Cell Phone Segment?

A prior article looks at Nokia’s new 105 candy style phone that it will retail for $20 to capture volume at the low end market. What is it planning for the Lumia/high end lines?  Recently Apple show cases the images that people capture with their iphones in a new commercial that is very effective in connecting with people directly.  Perhaps taking a page from the Alicia Keys, BlackBerry Keep Moving effort? Although, BlackBerry seems to have a problem taking the message to the people as effectively, with all lines of its marketing. Nokia Growth Partners, the venture- capital arm of Nokia (NOK1V) Oyj, plans to invest in California startup Pelican Imaging as it seeks to win back customers from Apple Inc. (AAPL) and Android devices with cameras that provide greater depth and more image manipulations for a better final image.

According to Adam Ewing (http://www.bloomberg.com/news/2013-04-29/nokia-invests-in-high-resolution-cameras-to-woo-apple-customers.html):

The Pelican investment is part of a push to differentiate Nokia as it tries to stimulate demand in its Lumia smartphones, which run Microsoft Corp.’s Windows software, to reverse falling sales and recover market share.

Lumia sales rose to 5.6 million in the first quarter, up from 4.4 million in the previous three months. Still, Apple and Android-based devices control more than 90 percent of the smartphone market to Espoo, Finland-based Nokia’s 3 percent, according to researcher Strategy Analytics. Imaging quality is one of the top three reasons to buy or return a phone, and as Nokia phones are known for their cameras, it’s seen as a good leverage point, according to Nokia Growth Partners.

Array cameras, which use multiple optics and mesh the data into one image, “are on the cusp of being commercialized and Pelican does software for that,” Bo Ilsoe, a partner at Nokia Growth Partners, said yesterday in a phone interview from California. “It’s very complicated to do this algorithmically and Pelican is one of the companies that has mastered this technology.”

Nokia Growth Partners has been tracking Mountain View-based Pelican since soon after its founding in 2008, Ilsoe said. Pelican also counts Globespan Capital Partners, Granite Ventures, InterWest Partners and IQT among its private-equity investors, according to its website.

Nokia, which bought Lund, Sweden-based imaging-software maker Scalado last July, released the 41-megapixel 808 PureView last year and is incorporating the technology in smartphones including the flagship Lumia 920. Nokia Growth Partners has also invested in Menlo Park, California-based image-sensing technology company InVisage Technologies Inc. and micro-optics maker Heptagon, headquartered in Singapore, to bolster its capabilities.

Nokia shares, which have fallen more than 80 percent since the iPhone was introduced in 2007, were unchanged at 2.53 euros at 1:48 p.m. in Helsinki trading after climbing as much as 1.6 percent today. The shares have dropped 14 percent this year.

Nokia Growth Partners has around $600 million under management. It’s made two other investments from its latest $250 million fund. Typical investments are between $4 million to $7 million and are usually capped at about $15 million. It expects to invest in as many as six other companies this year, Ilsoe said.

“Over the next three to five years, mobile enterprise and advertising will be areas we’ll continue to invest around,” he said. “We build a portfolio and a better in-depth understanding of ecosystems by having this approach.”

So What is Nokia Up To?

I have been with T-Mobile for about ten years, and my first phone was, if I recall correctly, a Nokia candy phone of the Symbian  60 model 3300 variety.  I learned to text message on this device. Along the way, I have also had a Samsung SGH-R255M, pictured above, that fits the palm of my hand, and a Sony Ericsson T80.  I have had a Nokia slider Music 5300 that also fit nicely in the palm of my hand, that I still carry with me when I travel to Canada or Europe and slip in a local SIM card.  I must say that I do like the ability to easily slip my phone in my pocket.  The 5″ sized Samsung of late boggles my mind, as one needs a purse for such a phone.

My introduction to smart phones, was really, I guess,  a pseudo smart-phone, the Nokia 5230 Nuron, which I was (I hate to admit it, but it is true..) using until I finally cut the SIM and stuck it into the OS 10 Dev Alpha device a few months ago.  Having been using the BlackBerry OS 10 device, it is not likely that I will go back to Nokia, especially with the Windows partnership.  None the less, I recently decided to buy some Nokia stock to balance my BlackBerry holdings.  At $3.32 it is a bargain, and I think it can only increase in value over the long term.

Nokia 5230 Nuron shown above

So, I thought that I would write about what Nokia is up to, near as I can see.  It seems like the company is betting on volume sales by making an innovative phone that will sell for $20. The Nokia 105 features preloaded games, a color screen, a radio, a speaking clock and a flashlight. The phone, Nokia’s cheapest ever, has been available for a few weeks in India and Indonesia and will soon start selling in Europe.  The phone is expected to have margins of 20% and compete with the Chinese entries from ZTE and Huawei Technologies Co. that have whittled away at Nokia’s volume sales of low end phones.  The same can be said about what is now happening to BlackBerry’s OS 7 base.  The idea is to build brand loyalty at the low end to carry through to the higher end Lumia lines.  From the Bloomberg article referenced below:

“The low-end, high-volume part of the mobile-phone market is a huge opportunity for Nokia (NOK1V) in developing countries,” said Francisco Jeronimo, an analyst at IDC in London. “These users will be likely to upgrade to more expensive phones over time, so it’s a good strategy to keep a high market share in this segment. The 105 is “very competitive” and should help Nokia with its low-end recovery effort, said Neil Mawston, an analyst at researcher Strategy Analytics in London. A predecessor to the 105, called the 1280, sold more than 100 million units over three years. Simpler phones have “been the bedrock of Nokia’s business for the past decade,” Mawston said.

Nokia’s expertise in handset production makes it possible to turn a profit on a $20 phone, Jeronimo said. For years the world’s largest mobile-phone maker and now No. 2, Nokia makes more than 600,000 phones a day in seven factories around the world, using parts from suppliers it knows well. Chinese rivals may be able to make a device as cheap as the 105, but they lack the features and services from Nokia, Jeronimo said.

The candybar-shaped 105 is 25 percent cheaper than the Nokia 1280, yet its battery lasts 56 percent longer — 35 days. The phone is resistant to water and dust and comes with text- message-based tools that teach English and provide basic health- care advice.

Despite such features, the company sought to simplify the phone’s software, which in turn allowed it to use cheaper parts, said Dirk Didascalou, head of R&D for Nokia’s mobile-phone business.

“To be successful at the low end, one needs to explicitly do innovative work with a focus on delivering value,” he said by phone from Nokia’s research facility in Beijing. “If you don’t, you get in a cost spiral where you’re always a bit too expensive compared to somebody else.”

Even as the slump in simple handsets has stolen investor attention, Nokia’s main goal is to make a full recovery in smartphones, where profit margins are widest. Apple (AAPL)’s 32- gigabyte iPhone 5 sells for $750, while Samsung’s Galaxy S4 goes for $640 and Nokia’s flagship Lumia 920 is $450.

Nokia sold 5.6 million Lumia phones, which run on Microsoft Corp. (MSFT)’s Windows, in the first quarter, up from 4.4 million in the previous three months. But the iPhone and Android control more than 90 percent of the smartphone market, while Nokia has just 3 percent, according to Strategy Analytics. So it’s far from clear Nokia can break that dominance even if its low-end devices recover, said Mikko Ervasti, an analyst at Evli Bank in Helsinki.

“Nokia may still be the second-biggest phone maker in the world,” Ervasti said. “But if it’s going to have a chance at long-term success it needs to make sure it also has the right smartphones.”

Nokia 105 shown above

Disclosure: I am long on BBRY & NOK.

No implicit or explicit suggestions for stock purchases are made herewith or anywhere on this site.

photo and quote source: http://www.bloomberg.com/news/2013-04-28/nokia-betting-on-20-handset-as-it-loses-ground-on-iphone.html