Miserable news for mobile phone mogul Nokia (NYSE: NOK ) this week: The kids hate their phones.
That, at least, is the conclusion Reuters took away from a survey just out of Finnish networking site Habbo Hotel, describing the most popular cellphone brands among teens worldwide. Albeit Nokia topped the list of most-loved cellphone brands with 21% of teens surveyed voting it their favorite brand, this was down eight percentage points from last year, and virtually tied with second place Sony Ericsson (a joint venture between Sony (NYSE: SNE ) and -- you guessed it, Ericsson (Nasdaq: ERIC ) .)
Rounding out the rankings, Korean cellphone makers made a strong showing as Samsung took third place, followed by LG Electronics. Surprisingly, Apple's (Nasdaq: AAPL ) uber-cool iPhone was only good enough to win it fifth place, however Apple’s ranking is in spite of a relatively small U.S. sample size and the company did move up from last year. Unsurprisingly, Motorola (NYSE: MOT ) brought up the rear as it dropped three slots to sixth. (And if you're wondering where Palm's (Nasdaq: PALM ) smartphones and Research In Motion's (Nasdaq: RIMM ) "CrackBerries" are in all this mess -- remember, it was high schoolers being surveyed, not middle managers.)
All surveys have their flaws, of course, and even when they don't, Reuters' take on the story demonstrates how even good surveys can be twisted out away from what they really say. Still, there's an important takeaway from this news for investors, and I'm here to tell you what it is:
Teens matter...
...if for no other reason than that they've got more shopping days left on the planet than the rest of us. And while it's true that Nokia still tops the rankings within this important market segment, the simple fact that its lead shrank sounds a note of warning to Nokia shareholders.
Why? Because it's bad enough to lose popularity and market share in a recession. With the global mobile phone market expected to contract 10% this year, cellphone makers need every point of advantage they can get over the competition. But it's even worse than that.
You see, one of the great hopes of Nokia investors is that sales not made today are sales that will be made tomorrow. "Tomorrow" being defined as that happy day when the recession ends, and pent-up demand for cellphones not-yet-bought is released. That's the day we're all waiting for, but... if Nokia is losing its "cool" factor, there's a risk that that pent-up demand will wash right by it. The more Nokia craters its advantage in areas that’ll provide a boost when diminished discretionary income rebounds, the more its shrinking global market share will slip. Those future dollars, yen, and euros will be pocketed not by Nokia, but by "somebody else."
That's the real significance of the Habbo Hotel survey. That's why you should be nervous.
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