Can China Mobile Really Save Nokia's Lumia?

Telecom & Wireless

Published: December 5, 2012 8:25 am

Shares of Nokia Corp. (NYSE: NOK) are trading higher this morning on news that it has signed a deal with China Mobile Ltd. (NYSE: CHL). Should the stock really be up? Will this really save Nokia?

By signing with the largest mobile provider in China, the Lumia 920T will get to be the first TD-SCDMA Windows Phone in China. The Lumia 920T will be available for order by the end of this year without a contract, and it will be available in black, white, yellow and red models.

We have to wonder if Nokia made an error on its pricing in the release it issued on this one. The offer price without contract is RMB4599, or about $739. Can the average Chinese mobile phone user afford that?

Apple Inc. (NASDAQ: AAPL) has not had the explosive relative growth in China compared to more developed markets, with many suspecting that price is giving the Google Inc. (NASDAQ: GOOG) a pricing advantage.

Nokia’s ADRs are trading up by 4% at $3.58 in early bird trading in New York, but shares were up 6% or so in overseas trading this morning. The ADR’s 52-week trading range is $1.63 to $5.87. One launch in China is certainly not a bad development. The question is whether Chinese consumers will move into the phones.

JON C. OGG

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