- The latest Asha devices have attracted very little attention but they could be the very thing that keeps the wolf from the door as Nokia struggles to make something from Windows Phone.
- The new phones launched (308 and 309) are interesting as they are good enough for the low end of the smartphone market and most importantly they are as cheap as chips.
- For $99 users get a 800MHz processor, 3-inch capacitive touch. 2MP camera and a 2GB MicroSD Card.
- Furthermore, s40 is a well known, stable and mature operating system meaning that the phones will run the preloaded software in a rapid and reliable manner.
- The same cannot be said for the low end Android devices where the aim of the game seems to get a touch-based device to the user at the lowest cost possible.
- As a result these Android devices cut corners, simply do not work as well as their higher end brethren and are unable to really make the most of the Android ecosystem.
- This makes me think that the fact that s40 has no real answer to the Android eco-system is less of a problem.
- Hence, the scene is set for Nokia to do reasonably well from these Asha devices coming into the all important Q4 season.
- Top line looks it will be healthy for Asha but what about margin?
- Nokia has long said that it would use volume to get discounts on component costs (especially screens) in order to get the price of the devices down but how far will this reach?
- My personal feeling is that the 3 inch screens are still pretty expensive even with a volume discount and therefore a sudden return to 10% margins in mobile phones (like last year) is extremely unlikely.
- However, I suspect they are at least profitable which with the stock at €2 is likely to be well received.
- Even minor traction on Windows 8 with some steadiness in Asha could drive optimism and hope which we all know is worth a lot to Nokia now.
- I am going into Q4 more optimistic than I have been for many a quarter.
Huawei – Slow Slippage
22 April 2024