Please ensure Javascript is enabled for purposes of website accessibility

Nokia's Passage to India

By Alyce Lomax – Updated Nov 16, 2016 at 4:27PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Finnish telecom giant puts down roots in India.

What a year it has been for Nokia (NYSE:NOK). Despite its ups and downs, things seem to be improving. The Finnish cellular giant plans to further its goal to tackle an important market, India, by planting a manufacturing facility in that up-and-coming country.

According to its press release, Nokia plans to invest $100 million to $150 million in the endeavor, along with its key suppliers. The company claims it's the market leader in India and said that growing mobile penetration in the Asia-Pacific region will help it increase its mobile subscriber base to more than 2 billion by 2006. (It was 1.3 billion as of its last annual filing with the SEC.) Nokia currently has 16 manufacturing facilities in nine countries (the U.S., Brazil, Mexico, Finland, Germany, Hungary, U.K., China, and South Korea).

However, despite Nokia's claim of leading the Indian market, rival Motorola (NYSE:MOT) says it was one of the first telecom companies to enter that market and that it has been there since 1987. Regardless, it's no secret to any of the cellular players that India is an important country to court.

In October, the Telecom Regulatory Authority of India said that the number of mobile phone users exceeded landline customers, having grown to 44.5 million. In addition, India's set to be the third-largest cell phone market by 2010, according to the Cellular Operators Association of India.

Developing trends like these are obviously not lost on Nokia. And it couldn't hurt for it to make some strategic moves like this one. After all, last summer things were looking a little ugly. Nokia shares fell to a two-year low on the negative sentiment, and Fools felt compelled to duel over the giant's prospects. As recently as August, there were concerns that the phone giant still wasn't supplying enough of one of its more popular models to meet demand.

However, the outlook appears to be brightening. Thanks to an alert member of our Nokia discussion board, I ran across a post today regarding Gartner statistics that show Nokia is taking back market share, creeping back up to 30.9% of the market after having fallen to 28.9%.

Meanwhile, Nokia shares have been staging quite a recovery over the last several months. They've improved by 50% since the darker days that are past us. Nokia's Indian excursion -- and hints of market share recovery -- give investors just a little bit more to feel hopeful about.

Talk Nokia on our Foolish discussion board dedicated to the subject.

Alyce Lomax does not own shares of any of the companies mentioned.

None

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Nokia Corporation Stock Quote
Nokia Corporation
NOK
$4.26 (-4.05%) $0.18
Motorola Solutions, Inc. Stock Quote
Motorola Solutions, Inc.
MSI
$228.76 (-1.41%) $-3.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.