Reinforcing its market-leading position, Nokia Corporation (NOK - Free Report) recently achieved a record 5G speed of up to 4.7 Gbps in its Over-the-Air network, backed by 800 MHz of millimeter-Wave spectrum and Dual Connectivity. This marks a significant milestone in the development of 5G technology in the United States. Moreover, the latest achievement underscores Nokia’s commitment to aid businesses and customers with superior network capacity, especially at a time when majority of communication service providers (CSPs) migrate toward experience-driven and automated 5G network operations.
Markedly, Nokia is focused on its strategy that hinges on four priorities. The first is to lead in high-performance end-to-end networks with its CSP customers. The second one is based on its pursuit to expand network sales to select vertical markets. Building a strong standalone software business is the third strategic priority. The fourth pillar emphasizes on creating new business and licensing opportunities in the consumer ecosystem.
The Finnish equipment vendor, which is considered to be the de-facto technology leader in 2G, 3G and 4G network implementations, is positioning itself as a one-stop solution for 5G. Notably, the 5G speed test took place in Dallas, TX. Backed by enhanced network capacity and ultra-low latency, Nokia leveraged EN-DC functionality or dual connectivity, thereby enabling the operators to transmit data simultaneously across 5G and 4G networks with higher transmission rates. Markedly, the company is focusing on dual connectivity feature on its Air-Scale platform as a way for operators to maximize their spectrum assets.
Equipped with intelligent analytics and automation, the company’s AirScale Radio platform is a ground-breaking technology that provides enhanced 5G network capacity with ultra-low latency and seamless connectivity solutions. Touted as the industry’s first-of-its-kind commercial end-to-end 5G solution, the avant-garde technology enables operators to capitalize 5G-backed opportunities to boost profitability as well as maximize the value of licensed and unlicensed spectrum with minimum future capital expenditures. Notably, the latest speed test demonstrates the ability of 5G to deliver ultra-fast mobile broadband to consumers, especially when both network capacity and connectivity bear utmost importance.
Of late, Nokia is focused on building a robust scalable software business and expand it to structurally attractive enterprise adjacencies. It has reached more than 66 commercial 5G contracts across the globe with 19 live networks. The company’s end-to-end portfolio includes products and services for every part of a network, which are helping operators to enable key 5G capabilities such as network slicing, distributed cloud and industrial IoT. It facilitates customers to move from an economy-of-scale network operating model to demand-driven operations by offering easy programmability and automation. Accelerated strategy execution, sharpened customer focus and reduced long-term costs are expected to position Nokia as a global leader in the delivery of end-to-end 5G solutions.
However, macroeconomic, industry and competitive dynamics continue to take a toll on Nokia’s performance. Its Mobile Access business has been impacted by increased competition in some accounts as rivals, including Huawei, seek to take share in the early stage of 5G. Also, some customers have re-evaluated their vendors in light of security concerns, creating near-term pressure for the Finland-based equipment vendor. It remains to be seen whether the successful speed test demonstrations can continue giving Nokia’s 5G efforts a boost as it competes with the likes of Ericsson (ERIC - Free Report) and Cisco Systems, Inc. (CSCO - Free Report) for market share.
Nokia’s shares have lost 27.6% compared with the industry’s decline of 8.8% in the past year. The Zacks Rank #3 (Hold) stock topped earnings estimates twice in the trailing four quarters. It has a trailing four-quarter positive earnings surprise of 129.1%, on average.
A top-ranked stock in the industry is InterDigital, Inc. (IDCC - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
InterDigital’s bottom line surpassed the Zacks Consensus Estimate in the last four quarters. The company has a trailing four-quarter positive earnings surprise of 99.5%, on average.
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