HELSINKI (Reuters) – - Nokia Oyj’s (NOK1V.HE) battered shares could get a boost when the firm looks ahead at next week’s investor day to an expected upturn in handset margins and a more competitive smartphone offering in 2010.
The world’s largest mobile phone maker uses the gathering of analysts and investors — held yearly in early December — to update its market view and issue forecasts for the coming year.
Twelve months ago Nokia forecast its handset unit operating profit margins for 2009 in the teens — 13-19 percent — but the company has just failed to hit that range due to the steep economic downturn.
Nokia and the rest of the cellphone industry have suffered in 2009 as consumers cut spending on new gadgets, with the more expensive end of the market seeing increasingly stiff competition.
Nokia’s shares have missed the stock market recovery, dropping 19 percent since the start of the year — mostly due to the company’s deteriorating smartphone offering — against a rise of 17 percent in DJ Stoxx European technology index .SX8P, in which it is the biggest constituent.
However, demand has started to recover and analysts say Nokia should benefit.
“I don’t expect much negative — the question is how positive it will be, and whether that is enough,” said Hannu Rauhala, analyst with Pohjola Bank.
On average analysts expect the cellphone market to grow 8.6 percent next year — rebounding from a contraction of seven percent in 2009 — with Nokia’s handset unit operating profit margin seen rising to 13.5 percent.
‘DUMBING DOWN’ SMARTPHONES
The smartphone market boom is expected to continue next year, helped by falling prices for the more advanced phones.
“Next year Nokia will make smartphones a mass market product,” said John Strand, chief executive of Strand Consult.