Nokia Rising: Argus Ups to Buy; €15 Phones Make a Splash - Barron's (blog)

By Tiernan Ray Shares of Nokia (NOK) are up 17 cents, or 5%, at $3.74, after Argus Research's Jim Kelleher raised his rating on the stock to Buy from Hold, with a $6 price target, writing that lower-cost phones, and perhaps really cheap phones, can make a difference for the company. Nokia is making progress balancing between smartphones and cheaper feature phones, but not getting credit yet, says Kelleher: Using the forum of the Mobile World Congress in Barcelona, the mobile industry's biggest event of the year, Nokia introduced four new phones. The two Windows Mobile-based smartphones are the Lumia 720, a mid-range phone, and the 520, an entry-level phone. Nokia also launched two extremely inexpensive feature phones: the 105, at a price point of 15 euros, or about $20; and the 301, which offers internet access and video streaming for 65 euros, or about $85. Our long-term thesis on Nokia has been that it must maintain its global footprint in feature phones while gradually building its smartphone franchise — in preparation for the not-too-distant day when all devices will be software-upgradable and allow high-speed network access. Nokia, in our view, is showing signs of achieving this balancing act, but the market has yet to reward any progress. "We do not anticipate a smooth road for smartphones or for the joint venture networking business," writes Kelleher, calling Nokia a speculative investment for those who are risk-tolerant. "But we believe that Nokia under CEO Stephen Elop is executing on its multifront strategy."Moreover, the NOK ADRS, trading below $4 per ADR, appear to represent good value based on many of the valuation metrics we track for the company and its peer group." The reaction from people here on the show floor in Barcelona, where the Mobile World Congress is taking place, is some degree of astonishment at the new 105 model, which costs just €15 wholesale. That means it costs almost nothing for an operator to sell it in an emerging market such as Africa. The device has a postage-stamp sized color screen, doesn't do data, and has a mere 2G wireless connection. But it is waterproof, rugged, has a 35-day standby time, and includes FM radio play and has a built-in flashlight. Nokia's new 105 feature phone sells for €15 before subsidy. The 105 has a built-in flashlight. via Technology - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNGsf1862X5qH-dJD0e9wBYcMWpngA&url=http://blogs.barrons.com/techtraderdaily/2013/02/27/nokia-rising-argus-ups-to-buy-e15-phones-make-a-splash/

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