Nokia's (NOK) plan to rally back

Nokia (NYSE: NOK) may be the world's largest handset maker with about 39% of the market, but it is often slow to pick up on innovations. A lot of its units are sold in emerging markets, where the cost of expensive features would kill sales.

The company is sick of having sand kicked in its face by Apple (NYSE: AAPL), Samsung and other firms that make the new, popular touchscreen handsets. According to the FT, "The Finnish group is seeking to become the world's largest maker of mobiles with touchscreens this year." Nokia has already put new phones like the N97 into the market in the hopes of picking up share.

Nokia has a problem; one that it may not be able to solve. Apple's 3G iPhone has been in the market for less than a year, but it has already locked up sales at the high end of the market. On what basis are those customers going to switch to a Nokia product? Apple also has resale deals with large carriers like AT&T (NYSE: T). Nokia may not be able to match those, at least not quickly. Nokia faces similar problems with competition like the Samsung Instinct.

Nokia may find that it has the "GM problem." Being the largest company in an industry does not mean being the most successful. Without the right product mix, being big only means carrying a huge load of corporate expenses.

Douglas A. McIntyre is an editor at 247wallst.com.