Once the darling of the cell phone set, Nokia (NYSE: NOK) has lost a lot of respect to Apple (Nasdaq: AAPL) and Research in Motion (Nasdaq: RIMM).



Chart Courtesy of StockCharts.com



Nokia's problem is that it's lost market share to Apple, RIMM, and others. Nokia's advantage is that it still has about a 34% share of the cell phone market. That means that based on volume, it's still the leader.

What it doesn't have is a killer phone like the Blackberry or the Iphone. Yet, if you look at the stock, it's starting to form a base, and it's showing a bit more strength.

Apple and RIMM shares are both starting to struggle. Nokia is selling at less than ten times earnings, which makes it cheap. Apple sells at 33 times earnings and RIMM at 17 times.

So that means that Nokia is the cheapest of the three, while having the leading market share. The question, though, is whether Nokia can keep its market share from eroding further.

Still, it current trends remain in place, Nokia's market share is likely to continue to drop. Unless, of course, anyone who's ever going to buy an I-phone or a Blackberry has already done so, which is hard to believe.

What's the point? The company that comes up with the next generation gadget that really rules the roost, is likely to solidify its place in the cell phone wars. It could be anyone of these three. For now, the charts say that value players may be starting to build positions in Nokia.

The stock is worth watching very carefully. We give it 3-stars right now.

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