Lots of investors have been waiting for sunnier news to come out of Nokia (NYSE:NOK) this summer, but brace for another setback. Today The Wall Street Journal reported short supply of what is turning out to be a popular phone model from the Finnish handset maker. It's a little disconcerting to hear, when the company is in the midst of trying to rejuvenate sales growth as well as protect and boost market share.
In case your memory needs refreshing -- and very likely, it doesn't -- Nokia warned in April. It was a painful scene as it became obvious that as powerful as the telecom giant is, it's been losing market share and facing flagging sales as its products weren't hitting on the most popular consumer phone picks.
The WSJ article tracked short supply in several London cell phone shops, including the online store for Vodafone (NYSE:VOD), the U.K.'s largest service provider. According to the article, when questioned Nokia admitted to both healthy demand and a lack of supply because of a shortage of components for the popular model.
The model in question is the Nokia 6230, a popular option as it has a built-in camera, one of the features that has resonated so well with consumers this year. (However, the Nokia 6230 happens to sport the "candy bar" design, not the "clamshell," the latter of which is the far-and-away favorite design for consumers in the upgrade cycle.) In addition to the camera, Nokia's gadget, which hit the market in March, has a built-in music player and FM radio.
Even though it's not the coveted clamshell, it does sound like a step towards providing a solid product for consumers who expect more from their cell phones than ever. Archrival Motorola (NYSE:MOT), which has been filching market share, isn't going to ease up. It recently announced a deal linkingApple's (NASDAQ:AAPL) iTunes to its phones, an aggressive bid perhaps to capitalize off of one of the most marked pop culture icons of the day, though its Apple hookup won't hit the market till 2005.
As much as it's heartening to hear that the Nokia 6230 has been enjoying a warm consumer response, today's news still sends a chill and the impression that Nokia's still got to pull itself together. (However, a ray of hope in the article indicated that some consumers have placed themselves on waiting lists for the Nokia 6230, as opposed to fulfilling their cellular wish lists through rivals.)
However, it was no surprise that investors barely reacted today. They've already slammed this stock pretty soundly (recently, Fool contributor W.D. Crotty examined the stock's two-year low), and for now, expectations are pretty grim. However, today's word underlines Nokia's mandate: It's got to give the people what they want.
Pick sides as you relive the valiant duel:
- Dueling Fools: Nokia's Ready to Deliver, by W.D. Crotty
- Dueling Fools: Nokia No Way, by Seth Jayson
Have your own duel with fellow Foolish investors on the Nokia discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
