HMD Global, the Finnish company that owns the Nokia (NYSE: NOK ) brand, has unveiled a new 5G smartphone, the Nokia XR21, in an effort to tap into the predicted growth of the European smartphone market. The announcement was made on Tuesday. The Nokia XR21 is currently available in limited edition and is primarily intended for enterprise customers.
The introduction of the new 5G device comes as a recent report by Canalys predicts a 7% increase in smartphone shipments in Europe (excluding Russia) next year, amounting to 132 million units. This year, however, the report anticipates a 13% decline due to factors such as extended device lifetimes and purchasing cycles, increased competition from second-hand markets, and high channel inventory levels across the region.
According to InvestingPro data, Nokia's market cap is $20.47 billion and it holds a P/E ratio of 4.74, which shows that it's trading at a low earnings multiple. This correlates with an InvestingPro tip that highlights Nokia's attractive valuation. The company has been profitable over the last twelve months, with a revenue of $27,564.38 million and a gross profit of $11,093.41 million.
Jean-Francois Baril, co-founder, chairman, and CEO of HMD Global, expressed his excitement about manufacturing their "signature rugged 5G smartphone" in Europe. He emphasized the company's dedication to enhancing security, technology and manufacturing processes to ensure more secure and longer-lasting devices. Future plans include further investment in software security with the aim of offering customized software and security features directly to customers.
The Nokia XR21 places a strong emphasis on security to meet the evolving needs of enterprise customers. Data from the phone is securely stored within the EU and each device undergoes rigorous software and malware testing. HMD also cautioned that 5G coverage may be limited and might not be supported by all network service providers as actual speed depends on network and other factors.
The global adoption of 5G has been largely positive with predictions indicating that 5G subscriptions worldwide will reach nearly 5 billion by 2026. Around 1 billion had already been reached by the end of last year. In Ireland, several mobile network providers are rolling out 5G across the country.
The Nokia XR21 will soon be available for the Irish market at a starting price of €649. The smartphone is designed with sustainability in mind, featuring a chassis made from 100% recycled aluminum and a two-day battery life that supports 60% more charges over its lifetime. Additional stages in the European production process are expected to further reduce emissions.
InvestingPro tips suggest that Nokia is a prominent player in the Communications Equipment industry, holding more cash than debt on its balance sheet. Despite seven analysts revising their earnings downwards for the upcoming period, Nokia has consistently increased its earnings per share and offers a high shareholder yield. For more insights and tips, visit InvestingPro.
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