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Nokia (NOK) beats earnings! Brick phones reign supreme!

October 20, 2011

Yes, and look how happy he is!

The last time I actually used my Nokia brick phone was to prop up a projector during a business meeting. That was this morning. I love my Nokia brick phone. It doesn’t have a camera, or even a color screen for that matter, but it makes calls, it texts, it even has a flashlight!

Bright and early this morning, Nokia shocked the world with a surprise sales beat. NOK is up about 7% in pre-market action after reporting EPS of $.03, beating analyst expectations of a .02 loss. While profits are down at Nokia, sales are up.

What does this tell us about the global economy?

It tells us that people are either (1) reverting to cheaper, simpler phones due to economic hardship; or (2) the developing world loves cheap Nokia brick phones. I am more partial to believe the former. Luxury goods are the first to be hit during economic downturns, and as you will know if you’ve read my other posts, I firmly believe we are in the early throws of a major global downturn. This pessimism is not reflected in the markets although it is front and center in the minds of most Americans. The truth is, things are not better than in 2008. If anything, things are worse. People have been out of work longer. Wages have stagnated. Congressional gridlock has eliminated political proactivity to fix economic problems.

Anyway, I’m very happy to see NOK beat earnings. Did I love my brick phone? I can drop it from the top of Steven Cohen‘s future subpoena pile (about 3km high), and it doesn’t break.

Maybe if Nokia brick phones make a big comeback, people will actually be able to have fluid dinner conversations. Maybe we’ll actually remember how to be compassionate, like we were before we checked our emails every 20 seconds. Implicit escapism from reality reigns supreme among iPhone and Crackberry addicts. I used to have an iPhone (correction: still have it, just never use it), and I was a member of the greater lemming populace — I couldn’t have a one minute conversation without checking my phone. The iPhone didn’t make me more popular, productive, or happier. In fact it detracted from my quality of life in every metric I can think of.

Hats off to Nokia. Really.

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