After reporting a loss for the fourth quarter, Nokia Corporation (NOK, quote) continues to fall. The company has been staking its future on sales of the Lumia smartphone, hoping to capture a large segment of the low-end mobile market — and that may be its undoing.
Investors buy the future earnings of a company when shares are purchased, and it doesn’t look like Wall Street is according much hope for Nokia to regain market share and profits. As reported previously on emergingmoney.com, the Lumia 710 has good reviews, but that may not be good enough.
Tata Motors (TTM, quote) has had similar problems with the Nano. The “world’s cheapest car” boasts a Good Design award from the Chicago Athenaeum Museum of Architecture and Design, but sales have been dismal. As Tata Groups chief Ratan Tata has lamented, the Nano has the “stigma” of a “poor man’s car,” and nobody wants to drive a poor man’s car.
The same fate is likely to bedevil Nokia. Low-end users in Africa and Asia will buy phone cards. Those who can spend $100 can get an inexpensive Droid or iPhone. The Lumia 710 occupies a narrow niche in between, a market that will only get narrower as personal electronics get even cheaper and more powerful.