Nokia Needs More Lumia Users: Pro
After Nokia reported weaker-than-expected sales and low margin for the first quarter, one analyst said the struggling smartphone maker needs to empower sales growth before driving up phone prices.
"It is more important for Nokia's prospective to get as many users as possible to buy the handset first and then later work on the brand and move up in the average sales price," lkka Rauvola, analyst at Danske Markets in Helsinki, told CNBC on Thursday.
The company said that regular mobile phones sales decreased to 55.8 million units and the average price for a Nokia handset was 47 euros for the latest quarter.
Rauvola said Lumia faces increased pressure from the recent launches of cheaper devices.
"The key thing people are looking at the moment is the handset profitability," Rauvola said. "The company guided for a flat Q2 versus Q1. I think it is good in these circumstances."
Nokia CEO Stephen Elop said in a statement, "Mobile phones business faces a difficult competitive environment, and we are taking tactical actions and bringing new innovation to market to address our challenges."
Rauvola said on the surface the results were a bit better than he was expecting. "The volumes are low but the average sales prices are a bit higher and the EPS was above," he said.
But that isn't enough for him to change his bearish stance on the stock.