Is Nokia Due For A Comeback In 2021?

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  • Nokia was once a leading technology company that has largely fallen from favour.
  • However, the Finnish technology Company generated €6.568 billion in Q4 2020.
  • Nokia is vying to be a major player in the 5G technology, just as it was in 4G.

In the 2000s, the Finnish Company Nokia (NYSE:NOK) was a front running technology company. Nokia owned 50% of the mobile phone space in 2007 and had a market capitalisation of ~US$150 billion back then.

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Presently, Nokia is a far humbler venture in comparison to its glory days. However, its annual revenue and market capitalisation are still enviable. In Q4 2020, Nokia generated €6.568 billion in revenue. It is currently valued at US$22.8 billion, as on 19 March 2021.

How Does Nokia Make Its Money Now?

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Nokia is generating revenue by providing several different internet services.

  • The Company’s most lucrative segment is mobile access services, including 4G and 5G infrastructure. In this domain, Nokia’s worldwide market share is approximately 28% (excluding China). In 2020, this segment generated more than €10 billion in revenue for the Company.
  • Sales of IP network infrastructure, such as routers, generated more than €3.2 billion for the Company in 2020. The software segment of Nokia, which contributes to the running of networking devices, among other things, generated €2.5 billion in the same year.

While Nokia does generate a significant level of income, it is currently running at a loss. The Company is throwing money into 5G research and development in order to better compete with Huawei, Samsung, and Ericsson.

What Is Nokia’s Future?

Nokia’s future is firmly in mobile connectivity. The Company has announced several partnerships over the past few months that are positive indicators for its future.

  • A five-year deal was recently signed with the American telecommunication company AT&T. Nokia will be deploying AT&T’s 5G network across parts of the US.
  • Last week, Nokia announced that it will support the French telecommunication company Orange in organising its entire mobile communication infrastructure, including 2G,3G, 4G and 5G.
  • The Belgian telecommunication company Telenet has partnered with Nokia to help streamline its fixed and mobile services, including the deployment of 5G technology.

On 19 March, Nokia shares closed at US$4.02, increasing by 2.81%.

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