Nokia: Is The N8 A Dud?

Is the new Nokia (NOK) N8 smart phone a dud?

Pacific Crest analyst James Faucette thinks it might be. “Our Western Europe checks indicate there is little
to no pent-up demand for the N8 given its price point,” he writes in a research note. “Given that the device is priced in line with the iPhone and above most Android devices, we believe demand, outside of Nokia enthusiasts, will likely wane almost immediately upon launch.”

Faucette also thinks that Nokia’s Symbian OS is becoming an increasing problem for the company. “Our checks indicate that salespeople at every level heavily favor Android-based products over Symbian-based phones due to perceptions of less flexibility and reduced capabilities in the Symbian OS,” he writes. “Furthermore, our conversations with developers indicate that the functionality gap will only expand for the foreseeable future.”

The analyst maintains his Sector Perform rating on the stock. “While we believe many have recently grown more constructive on the name based on prospects in emerging markets, we believe there is significant risk to Nokia�s position in emerging markets, wherein competition is likely to increase significantly in the next six months,” he writes. And Faucette adds that “with little likelihood of a return to earnings growth, [the] stock looks expensive.”

NOK is down 28 cents, or 2.6%, to $10.66.