Having suffered three years of criticism for its lacklustre handsets and financial performance, Nokia might be on the verge of a comeback with the launch of its much-anticipated N8 smartphone.
Indications that financial analysts are prepared to believe the N8 could rejuvenate the company's fortunes come from Morgan Stanley which has raised its rating on Nokia by two notches to overweight from underweight. Perhaps more importantly, the firm has lifted Nokia's price target to €9 from €6.50.
The reason behind this new-found optimism is positive feedback from retailers and suppliers suggesting a better-than-expected uptake of the forthcoming N8 smartphone and at a smaller discount than feared.
This change in sentiment, said Morgan Stanley, implied that the average selling price of a Nokia handset could grow in 2011 for the first time since 2000 and may help the Finnish manufacturer increase its market share in the fourth quarter.
Albeit that the N8 was first unveiled in April and is only just becoming available later this month, Ben Wood, director of research at CCS Insight, said that Nokia would be hoping that the N8 and other new devices could lay the foundation stones for its recovery. "It has made some big commitments on fixing Symbian and its first flagship product using the refreshed Symbian operating system. Failure is not an option."
However, the N8 might struggle in an increasingly competitive smartphone market given its only USP would seem to be its 12 megapixel camera. Samsung's top model Galaxy S and the latest iPhone have faster processors and proven UIs, whereas the new Symbian^3 operating system still needs to establish its credentials.
The short-term success of the N8 could dictate whether Nokia's embattled CEO, Olli-Pekka Kallasvuo, remains in his post.
For more on this story:
- read Market Watch & Reuters
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