Nokia (NOK) Will Be Interesting in 2012

With shares of Nokia (NYSE:NOK) lingering below the $5.00 mark, it makes the mobile phone company an interesting company in 2012.

A significant number of those watching the company appear to have put far too much emphasis on the Nokia's first release of a Microsoft's (NASDAQ:MSFT) Windows Phone 7 phone in Europe, which has only gained about 2 percent market penetration.

The assumption is the phone has been rejected, when if fact there is no doubt it was more of a trial balloon to get feedback from the market.

That's not to say Nokia wouldn't have loved to have been surprised by the offering, but it was never the purpose.

Until they roll out a few offerings using Windows Phone 7, we won't really know how the market responds to the company. The conclusion of some that the Nokia, Windows partnership has failed is premature, to say the least.

That said, 2012 is a crucial year for Nokia, and they need to gain some traction to convince investors they can generate growth going forward.

It'll be very interesting to see how the U.S. market responds when the company releases its first phone there, which will be in early 2012.

If Nokia is able to generate some legitimate interest, the current share price could definitely be considered a bargain.

Nokia (NOK) Remains an "Outperform" at RBC

Saying Nokia (NYSE:NOK) will be strengthened by its dual SIM phones, RBC Capital Markets said today it maintains an "Outperform" rating on the company, with a price target of $9 in place.

According to RBC Capital Markets analyst Mark Sue, units shipped in the current quarter will increase from his prior estimate of 89 million to 100 million, citing the dual SIM phones, which are popular in China and other markets, as the catalyst.

This should help the company during its transition to the Windows Phone 7 operating system, which may be on the first "N9" unit from Nokia when released in October.

In comparison to Symbian, developers are high on the simplicity connected to Mango.

Nokia was trading at $5.88, down $0.01, or 0.25 percent, as of 11:35 AM EDT.

Nokia (NOK) May Release Microsoft (MSFT) Phone Earlier Than Expected

The short-term narrative for Nokia (NYSE:NOK), as far as it relates to releasing a phone using Microsoft's (NASDAQ:MSFT) Windows Phone 7 platform is whether or not they can get a smartphone released earlier than expected.

According to Wedge Partners analyst Brian Blair, the company is “ahead of schedule in terms of development,” and could release one before 2012.

As to the overall outlook Blair states, “While we continue to feel the next three to four quarters will reflect the company’s transition away from the Symbian OS and show a marked drop in quarterly units for Nokia, we remain positive on the longer-term outlook for Nokia given the Microsoft partnership. It is our view that Nokia Window’s smartphones will become the fourth major player in the smartphone space, following Google (NASDAQ:GOOG) Android, Apple’s (NASDAQ:AAPL) iOS and RIM’s (NASDAQ:RIMM) Blackberry OS.”

Blair expects the first phone offered by Nokia on the Windows Phone 7 platform could be debuted a the “Nokia World” conference, which usually is scheduled in the last quarter of the year.

Nokia was trading at $8.51, down $0.10, or 1.10 percent, as of 11:17 AM EDT.

Nokia (NOK) Results Beat Expectations, But Loses Market Share

For the first time in over 10 years, the global market share of Nokia (NYSE:NOK) dropped below 30 percent, even as the company beat analysts' expectations for the latest quarter.

Net profit for the quarter fell from euro5 million to euro344 million ($499 million) from the same quarter last year. Revenue grew 9 percent to euro10.40 billion.

Revenue and earnings beat estimates, giving the company shares a boost in earlier trading, although it has pulled back on weaker guidance associated with the transformation to Windows Phone 7 (NASDAQ:MSFT) and effects of the earthquake in Japan, which will impact the performance of the company in the current quarter because of parts shortages.

Nokia sold 24 million smartphones in the quarter, a 13 percent increase over 2010, but its market share for the devices fell to 24 percent from 39 percent last year, according to Strategy Analytics market research.

Nokia sold 108.5 million devices in the first quarter, above the Strategy Analytics estimate of 105 million, and the average selling price of its handsets continued its growth to euro65, from euro62 a year earlier, indicating it is selling more top, expensive models.

"Volumes were better than expected and pricing was stronger," said Neil Mawston, an analyst at Strategy Analytics . "But it's clear that competition is still tough."

This is actually better news than most realize, as the market is growing for smartphones and basic mobile phones, and even if Nokia drops in market share, it is gaining by growing along with the overall market.

So to lose market share isn't that relevant for them, it's how they're growing along with the expanding market.

Competition will continue to be tough from Google Android (NASDAQ:GOOG), Apple iPhone's (NASDAQ:AAPL) and Blackberry's (NASDAQ:RIMM). But if Nokia responds as they should, it'll make them a better company and competitor over the long haul.

If Nokia can keep up this type of performance until they release significant volumes of smartphones based on Windows Phone 7, and those phones sell well, the company will surprise a lot of people.

Nokia was trading at $8.60, gaining $0.01, or 0.06 percent, as of 1:41 PM EDT.

Nokia's (NOK) Basic Phones Key to Short-Term Results

Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT) have received a lot of attention from the deal to use Windows Phone 7 as the platform of choice for its smartphones, but the financial health of Nokia over the next several years will probably be determined by its ability to continue to compete strongly in the low-end mobile phone market.

Fighting a battle on these two fronts is what Nokia faces, although the real battle is in its basic phones as far as giving the company the time it needs to make the transition to its higher-end offerings, which will take time.

So while the attention of shareholders has been on the longer term strategy of Nokia, the reality is in the short term they must maintain solid results in the low end market in order to have a chance in the high end. That will be the Nokia story over the next several years.

With the combination of cost cuts and increased investment, Goldman Sachs (NYSE:GS) sees Nokia as a turn-around opportunity. Only time will tell if that's an accurate assessment.

Nokia was trading at $8.31, falling $0.09, or 1.07 percent, as of 1:58 PM EDT.

Smartphones Leaders (GOOG) (AAPL) (MSFT) (NOK) (RIMM) by 2012

Google's (NASDAQ:GOOG) Android will soar to become an even more dominant force with smartphone by 2012, according to a report from Gartner, which sees them controlling about 50 percent of the smartphone market by then.

Smartphone users with Android platforms in 2012 will reach 310,088 million, based on Gartner estimates. That would account for 49.2 percent of the smartphone market.

This year Android should surge to about 38.5 percent of the market, after controlling about 22.7 percent of the market, Gartner said.

Microsoft is increasingly considered a dark horse in the smartphone race, increasing from a 4.2 market share in 2010 to 19.5 percent by 2015. Estimated users would jump to close to 216 million with that share. That will be driven by the partnership with Nokia (NYSE:NOK).

For Nokia, its Symbian platform is expected to drop to only 661 thousand users by 2015, a 0.1 percent market share. In 2010 it was the market leader with 37.6 percent.

Apple (NASDAQ:AAPL) will remain somewhat level, increasing from 15.7 percent in 2010 to 17.2 percent in 2015. Gartner said it believes Apple will peak in 2011, when it reaches 90.56 million users.

Research In Motion (NASDAQ:RIMM) is projected to fall from 16 percent in 2010 to 11.1 percent by 2015. That would represent 122.86 million users.

In 2011 Gartner predicts smartphone sales will soar 57.7 percent over 2010, reaching 486 million units sold.

Nokia (NOK) Debt Downgraded by Moody's (MCO)

Nokia (NYSE:NOK) had its senior debt rating cut by Moody's (NYSE:MCO) from "A3" to "A2," along with a negative outlook on the company based on its declining position in mobile devices.

While the ratings are still investment grade, it will affect approximately $7.6 billion.

Moody's noted that Nokia inflexible smart phone operating system, slowness in introducing new models and more attractive innovation by competitors has brought the company to where it's at today.

They did say Nokia CEO Stephen Elop is starting to take steps to address the issues, but that will take time.

"In the short term, however, Moody's expects a significant degree of uncertainty about the financial impact on Nokia of the transition and about the level of eventual acceptance of the Windows Phone device offering," the ratings agency said.

Nokia Was trading at $8.95, dropping $0.07, or 0.78 percent, as of 11:32 AM EDT.

Nokia (NOK) Sees Strong WP7 Sales in 2012

Saying talks with Microsoft (NASDAQ:MSFT) are proceeding on schedule, Nokia (NYSE:NOK) sees 2012 being solid year for selling the devices built on the new Windows Phone 7 platform.

Kai Oistamo, head of corporate development at Nokia said, "Negotiations have progressed very well. They will be concluded well on schedule."

On February 11 the two companies signed a non-binding agreement for Nokia to use Windows Phone 7 as its primary smartphone platform while they work out the details.

Since then Nokia CEO Stephen Elop said it would be a couple of months before the deal would be finalized.

Nokia was trading at $8.68, gaining $0.13, or 1.52 percent as of 2:45 PM EDT.

Nokia (NOK) Price Target Slashed on Supply Fears

Nokia (NYSE:NOK) had its price target cut by RBC Capital’s Mark Sue Friday, citing concerns over possible supply issues.

Sue also lowered his price target on Motorola Mobility (NYSE:MMI) earlier in the trading day for similar reasons.

He wrote in a note, “Things may get better, but it will also take the supply chain quite some time to recover.”

The problems surrounding the overall industry, and Nokia in particular, concern the second quarter, where supply disruptions would impact the bottom line.

In the first quarter, Sue sees Nokia beating his estimates of 106 million units sold, while in the second quarter supply problems could cause units sold to drop from 109 estimates units delivered to 102 million units delivered.

As for the fear over the transitional period to Windows Phone 7 (NASDAQ:MSFT) having a negative impact on Nokia's sales of Symbian devices, he said that “Despite all of the concerns that consumers will leave the Symbian OS in droves, it just isn’t happening."

“The vast majority of consumers generally don’t seem overly focused on the device’s operating system, which explains the near-term healthy unit dynamics.”

Nokia was trading at $8.49, down $0.02, or 0.24 percent, as of 12:33 PM EDT. Sue lowered his price target on the company from $14 to $12.

Microsoft (MSFT) Targets Quality for Windows Phone 7

Microsoft (NASDAQ:MSFT) is talking the progress it has made on its Windows Phone 7 platform, saying it's focusing on quality rather than quantity at this time, as far as the number of apps it's serving up.

Even so, they're still steadily growing in that regard as well, with about 36,000 registered developers for the platform, with tools for developers being downloaded approximately 1.5 million times.

Also noted is the 11,500 applications being offered, with about 7,500 of them being paid applications.

Of course those are far behind Apple (Nasdaq:AAPL) and Google (Nasdaq:GOOG), although it's questionable as to value when you start getting into the number of app offerings and if they are profitable beyond a certain point for any of these companies.

Brandon Watson, Microsoft's senior director for Windows Phone, wrote in a company blog post, "For us, from the beginning, we have always been focused on quality over quantity. We recognize the importance of getting great apps on our platform and not artificially inflating the number of actual apps available to customers by listing 'wallpapers' as a category, or perhaps allowing competitor's apps to run on the platform to increase 'tonnage.'"

The comment on tonnage was a reference to Research In Motion's (Nasdaq: RIMM) decision to allow Android apps to run on its soon-to-be-released BlackBerry PlayBook tablet. RIM co-CEO Jim Balsillie mentioned that the strategy would boost the "tonnage" of apps available for the PlayBook on launch.

As for Microsoft apps, they claim they're adding about 1,200 developers a wee and users are downloading a dozen apps a month.

IDC recently said they see Microsoft becoming the second-largest smartphone platform in the world by 2015, based on their partnership with Nokia (NYSE:NOK).

Nokia (NOK) Downgraded by S&P to "A-"

Standard & Poor's lowered its debt rating on Nokia (NYSE:NOK) for the first time in its history, citing the loss of market share during Nokia's transition to Microsoft's (NASDAQ:MSFT) Windows Phone 7 platform.

"The downgrade reflects the revision of our business risk profile assessment on Nokia to ‘satisfactory’ from ‘strong,’ primarily because we expect that Nokia’s smartphone portfolio will make further significant market share losses during 2011 and 2012 until it has completed its adoption of Microsoft’s Windows Phone software as its new primary software platform for smartphones," S&P said.

S&P cut its rating on Nokia to "A-" while including a Stable outlook on them. Nokia has been rated "A" for the last 13 years.

As of the end of 2010, Nokia had about $7.5 billion in long-term debt it held.

Nokia was trading at $8.62, falling $0.06, or 0.69 percent, as of 12:04 PM EDT.

Nokia (NOK) Driving WP7 (MSFT) to Top Apple's (AAPL) iPhone

In an interesting and possible scenario put forth by Research firm IDC, they see Microsoft Corp.'s (NASDAQ:MSFT) Windows Phone 7 beating out Apple's (NASDAQ:AAPL) by 2015, citing the partnership they have with mobile phone giant Nokia (NYSE:NOK).

"Up until the launch of Windows Phone 7 last year, Microsoft has steadily lost market share while other operating systems have brought forth new and appealing experiences," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "The new alliance brings together Nokia's hardware capabilities and Windows Phone's differentiated platform. We expect the first devices to launch in 2012. By 2015, IDC expects Windows Phone to be number 2 operating system worldwide behind Android (NASDAQ:GOOG)."

IDC also said they see Apple's share shrinking some from the projected 2011 levels over the same period of time ending in 2015.

For Google, they see Android continuing to gain market share and ultimately dominating the sector, rising to a 45.40 share by 2015, up from the 39.5 percent share expected by the end of 2011.

"Android is poised to take over as the leading smartphone operating system in 2011 after racing into the number 2 position in 2010," Llamas added. "For the vendors who made Android the cornerstone of their smartphone strategies, 2010 was the coming-out party."

For 2011 IDC estimates Research in Motion (NASDAQ:RIMM) will have a market share of 14.9 percent, dropping to about 13.70 percent by 2015.

The bottom line for the Nokia, Microsoft projection is to deliver the goods. If they do, it could be a big player in the market, if not, they'll gradually shrink together in the mobile sector, with Nokia being hit the hardest.

Nokia closed Tuesday at $8.68, falling $0.06, or 0.69 percent. Microsoft closed at $25.49, gaining $0.08, or 0.31 percent.

Microsoft (MSFT) Offering Mobile Payments in Next WP7

According to people aware of the situation, Microsoft (NASDAQ:MSFT) reportedly will offer a mobile-payment feature in the next version of its Window Phone 7 operation platform. Presumably it may be offered with the release of its first Nokia (NYSE:NOK) phone, although that's not a certainty.

With the source saying the first phones with the feature may be released by the end of the year, it lines up with the goal of trying to bring a Nokia phone to market in that time period, or at latest, in the early part of 2012.

Users would be able to purchase items in stores by bumping a Windows Phone device against a compatible cash register.

The technology is based on what is identified as Near Field Communication, which allows devices to communicate wirelessly with objects close by. NFC technology enables not only payments but also lets consumers use a handset for such tasks as redeeming coupons and loyalty points at local merchants.

Microsoft closed Tuesday at $25.49, up $0.08, or 0.31 percent.

Will Nokia (NOK) Surprise with Low Expectations?

Once the deal with Microsoft (NASDAQ:MSFT) was announced by Nokia to use Windows Phone 7 as its smartphone platform, they quickly went out of favor with investors, who had for some reason hoped they would have chosen Google's (NASDAQ:GOOG) Android as the platform of choice.

As expected, the shares of the company were punished, with short- and long-term expectations very low.

That may have set the company up for success for the long haul, as the quality of the phones they make hasn't changed and the Windows Phone 7 platform has been highly thought of by those trying it out.

And in the North American and most other mature markets, Nokia has nowhere to go but up with their smartphone sales, and any percentage gain of market share will help the company, while they continue to serve emerging markets with less robust, but not less important, phones.

Even if investors don't think Nokia will turnaround any time soon, they can enjoy the dividend yield of 5.4 percent while they wait.

Taking into account the love affair many users have with Apple (NASDAQ:AAPL) and Google in this sector, Nokia could be positioned to surprise, and it's highly probable that they do as the attention remains on these two companies, and to a lesser extent on RIM (NASDAQ:RIMM) and Motorola Mobility (NYSE:MMI).

Nokia closed Thursday at $8.45, gaining $0.07, or 0.84 percent.

HTC, Not (AAPL) (RIMM) (MMI) Top Smartphone Vendor in U.S.

In the fourth quarter there was a new company ruling the smartphone roost in the U.S., as Taiwan-based HTC surpassed major vendors like Apple (NASDAQ:AAPL), RIM (NASDAQ:RIMM) and Motorola (NYSE:MMI) with a 20 percent share of the market.

Apple and Blackberry fell to a market share of 19 percent each, while Motorola was fourth with a 16 percent market share, according to a report by NPD Group.

The remaining 26 percent U.S. smartphone share was spread among Samsung, LG, Nokia (NYSE:NOK) and HP/Palm (NYSE:HPQ), among others.

While HTC generated the majority of its sales in the fourth quarter from phones equipped with Google's (NASDAQ:GOOG) Android platform, the thought is it was actually the debut of devices running Microsoft's (NASDAQ:MSFT) Windows Phone 7 that brought them to the No. 1 spot.

As for specific device sales, Apple is still No. 1, for 2010 with the iPhone 4 (16 and 32GB varieties combined) taking the top spot and its prior iPhone 3GS taking #2.

Nokia (NOK) Says No to Symbian CDMA Phones

One of the major transitions that Nokia (NYSE:NOK) will make as it changes under new CEO Stephen Elop is an embrace of the wireless technology CDMA, which Verizon Wireless (NYSE:VZ) and Sprint (NYSE:S) use. For years, Nokia has only released devices that work on another — more widespread — wireless technology called GSM. In the U.S., that limited the introduction of Nokia phones to AT&T (NYSE:T) and T-Mobile USA. In a strategy to widen its addressable audience, however, Nokia will eventually issue CDMA handsets, Elop revealed at the February Mobile World Congress trade show.

Those Nokia CDMA handsets, though, are still off in the future. In an interview at the CTIA Wireless conference, Nokia USA Vice President and General Manager Mark Slater told Forbes that the Finnish company is unlikely to make any CDMA phones that run on Symbian, Nokia’s longtime mobile operating system. Instead, Nokia will wait until it has devices on Microsoft’s (NASDAQ:MSFT) Windows Phone platform. “Our go-forward smartphone platform for CDMA will be Windows,” said Slater.

That means no CDMA Nokia phones until 2012 or even later, potentially. Nokia has been understandably vague about the timing of its Windows Phone handsets, hinting that the first device may arrive before the end of the year. The bulk of Nokia Windows Phones will come later. In a recent regulatory filing, Nokia indicated that its transition to Windows Phone as its primary smartphone platform would take two years.

For now, Nokia’s focus in the U.S. remains on affordable, Symbian, GSM-based smartphones. On Sunday night, the day before the CTIA show officially kicked off, Nokia unveiled its latest entry, the T-Mobile Astound. The device is a slim touch-screen powered by the latest version of Symbian. It will go on sale exclusively at T-Mobile USA in April for $79.99.

Nokia was trading at $8.39, down $0.01, or 0.12 percent, as of 1:56 PM EDT.



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Nokia's (NOK) Tablet Platform May Not be Microsoft (MSFT)

While Nokia (NYSE:NOK) has made its decision to use Microsoft's (NASDAQ:MSFT) Windows Phone 7 for its smartphone strategy over the long term, that's not the case at this time concerning its entry into the tablet computer market, with their existing MeeGo platform, which they developed together with Intel (NASDAQ:INTC), still being in play, said an person aware of the situation.

The source said the cellphone maker is still taking into consideration its options for tablets and these include MeeGo, a platform Nokia has been jointly developing with Intel.

This isn't to say Microsoft isn't still in the race for the device, but that the final decision has yet to be made, and Nokia isn't in a hurry to force it, saying they want to get their first tablet right.

Even though some say Nokia and others like Samsung, Motorola (NYSE:MMI) and Research in Motion (NASDAQ:RIMM) and Hewlett-Packard (NYSE:HPQ) are late to the tablet game, that's nonsense, as the tablet wars are just heating up, and it appears it's going to be a long, drawn-out battle, with a lot of room for growth outside of the leader Apple (NASDAQ:AAPL).

For Microsoft, a tablet platform will be based on its upcoming Windows 8 PC operating system, rather than its Windows Phone software, and that's not due to be released until the latter part of 2012. Could it be that Nokia may release a Meego version first and then implement a Microsoft version later to see which takes hold better? Only time will tell.

Nokia was trading at $8.35, gaining $0.07, or 0.91 percent, as of 1:44PM EDT.

Nokia (NOK) Working on Windows (MSFT) Nokia Phones Says Elop

Nokia (NYSE:NOK) Chief Executive Officer Stephen Elop said the mobile phone giant has already started to develop a smartphone which will use Microsoft's (NASDAQ:MSFT) Windows Phone 7 as a platform.

Elop also shot down the idea that Microsoft was interested in acquiring the company. "I'm not aware of a strategic interest that Microsoft would have in the rest of the business," Elop said.

"To the extent that a partnership has been formed around what they're really interested in, then what would an acquisition bring other than a good year of anti-trust investigation, huge turmoil, delays?"

Close to half of Nokia's mobile phone revenues come from more basic mobile phones, which are popular in emerging markets. The company has struggled to establish its brand in the United States, especially since Apple (NASDAQ:AAPL) launched its iPhone.




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ZTE Waits on Microsoft (MSFT) Over Windows Phone 7

While not a household name, ZTE is the world’s fifth largest handset manufacturer. And they’re waiting Microsoft's (NASDAQ:MSFT) Windows Phone 7 to become more popular and make some improvements before they launch a product using the platform.

Fresh from releasing satisfying annual results—full-year net profits at the handset and infrastructure maker rose 32% because of strong orders from outside China—ZTE’s Wu Sa, the U.K. Director of Mobile Device Operations, said that they had phones running Windows Phone 7 in their laboratories, but they had no immediate plans to launch a product.

He implied that the company was not happy with Microsoft’s response to the phone’s performance. ”We anticipate that Microsoft will respond more effectively to market needs in terms of user experience [and] in terms of cost,” he said.

Microsoft was trading at $25.04, up $0.26, or 1.05 percent, as of 1:18 PM EDT.




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Microsoft's (MSFT) New Office For Tablets

With the possibility of generating billions more through the wildly popular tablets, Microsoft (NASDAQ:MSFT) is getting a version of Office together to offer on the device.

On desktop and laptop computers Microsoft generates over $10 billion in sales annually. Add to that a portion of the tablet market (even with some cannibalization) and it could be a big boost for the software giant.

To get an idea of what Office for tablets will be like, it's closer to the version offered on Windows Phone 7 than its computer predecessor.

What Microsoft has named the "Metro" interface, which allows a user to switch between functions like Mail, Calendar, and Contacts in Windows Phone 7, will be included in the tablet Office version as well.

Microsoft closed Thursday at $24.78, down $0.01, or 0.04 percent.