Nokia’s ASP and gross margin bodes well for BBRY
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Within the company’s recent fourth quarter report, Nokia reported an increase in both feature phone and smart phone sales driven by recent new product launches including the Lumia handset. Total smart phone sales totaled 6.6 million units in the quarter, a 300,000 unit increase from the 6.3 million handsets sold in 3Q 2012. This was the first time in three quarters that Nokia increased its smart phone sales as unit sales had been in decline since 4Q 2011. Importantly, Nokia’s average selling price also rose from $155 per unit in 3Q 2012 to $186 per unit in 4Q as new, more expensive, Lumia sales blended ASPs higher.
The ASP rise, and also the gross margin improvement in the Nokia quarter, bodes well for Blackberry which launched its new Blackberry 10 handset this week. As outlined in our article, All important Blackberry 10 launch for RIMM upcoming, we note that most Street analysts are assuming an ASP increase which is leading to improved earnings estimates as a result of the new launch for BBRY. The Blackberry 10 launch yesterday was met with some enthusiasm on the functionality, but some disappointment on it’s market timing. BBRY sent the message that one of the functions that sets it apart from Apple (AAPL) and Samsung is that its new phone allows users to access data from multiple applications on one screen which allows a user to create separate work and personal spaces on the phone display. The disappointment for BBRY shareholders, which sent the stock down over 15% in two trading sessions, is that the new handset won’t be available in the U.S. market until mid March, which is well behind the launch in smaller markets like the U.K. and Canada within a week.
The initial results of Nokia display that new technology has risen average selling prices, which is a good indication for the higher ASP’s now expected in the upcoming BBRY quarter.