Another key factor behind the recovery is NSN. Once a cash drain for co-parents Nokia and Siemens, NSN is now profitable thanks to massive restructuring.
While it still faces tough competition from global rivals such as Huawei and Ericsson, sales have picked up with its focus on fourth-generation (4G) Long Term Evolution (LTE) networks paying off.
The turnaround has also raised hopes that NSN may be ready to be sold or publicly listed soon. The co-parents' agreement over the venture lapsed earlier this month, freeing both parties to sell their stakes without consulting each other.
Nokia is seen as being in no hurry to sell its stake, given that the unit is bringing in cash. The company's net cash position was €4.4 billion at the end of 2012, and is expected to have fallen to €3.7 billion by end-March.
"We partly see it as the most valuable operating unit," said Nordea analyst Sami Sarkamies of NSN. "But I don't think Nokia is in any rush for the time being. They may actually be quite happy waiting, and maybe an IPO next year is more something Nokia is interested in."
With the possibility of a deal on the horizon, stronger-than-expected results from NSN could boost the market's valuation of Nokia.
The shares traded on Monday around €2.63 -- nearly double their lifetime low of €1.33 marked in 2012 but still lower than the €4-€5 many analysts see as the value of the company's "sum of parts" including its handset business, Navteq mapping unit and stake in NSN.
FIM's Schroder has a target of €4.00 on the shares. "When looking at sum of parts it's significantly higher. But of course you have to have a discount, with all the uncertainty," he said.
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