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Nokia has been advised to join the Android camp before it is too late for the company, considering its constantly sinking market shares and acquisition rumors being reported lately. Bernstein Research’s Pierre Ferragu is reportedly claiming that if one excludes the portion including Nokia-Siemens Networks, the company’s balance sheet is “in a rather tight net cash position,” and its stock is overvalued. Also Read - Nokia to unveil Windows Phone smartphones in India on Nov 14
Nokia has been losing its mobile market to other vendors for quite some time now. While the recent alleged merger rumors did help the company’s shares to go up by a few percent, its shares starting falling back soon after the rumors died. Nokia’s association with Microsoft for Windows Phone operating system is considered to be the main reason behind its dipping sales and shares. Moreover, Nokia’s lower-cost feature phones in the “Asha” line have also not done any good for the brand either.
Ferragu has further added that Nokia will have to “take the pill before one cannot afford to do so anymore” and adopt Google‘s Android software. He has thus suggested that it is time that the Finnish brand should join hands with Google for introducing Android run mobile devices before it is too late for the company.
“It is facing two structural challenges: its exposure to the disappearing feature phone market and the lack of traction of Windows phones. Both could cost Nokia a lot of cash in the near term, in restructuring, marketing/distribution support, and operational losses, which means it could be too late to address the problem in a couple of years,” Ferragu opines.
Meanwhile, today Nokia announced it will be buying Siemens’ share in Nokia Siemens Networks for $2.2 billion, raising fears on whether the company is planning to sell off its handset business.