Post Phone Release: Which Company has the Upper Hand?
Cecil is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Stephen Elop took center stage to unveil Nokia's latest prized possessions which were the Nokia Lumia 920 and Nokia Lumia 820. What happened after that? Well Nokia's stock value collapsed by 16%. This is a very suprising turn of events, everyone expected things to go the other way around. The funny part is that both of these phones boast of technology which everyone was really impressed with, from wireless charging to probably the best stock camera software out there. But where did things go wrong? Does this portray a weak future for Nokia and Windows Phone? or is this just a panic collapse?
First and foremost let's analyze what Nokia (NYSE: NOK) announced. Nokia is set to lauch two phones in Q4, apart from this Nokia's Lumia 920 is out to compete with the best in the smartphone market out there. In all honesty being a smartphone addict myself Nokia have upped their game, windows phone was always promising the moment Windows phone 7 came into picture. This phone has an amazing display, a superb camera along with other industry leading specifications. So from an "end product" perspective Nokia did a very decent job.
Where did Nokia goof up? Well it all started when questions were raised during the presentation and the answers that were as vague as it gets. For example Wall Street investors were all puzzled when Nokia replied to questions like "Where would the product be released exactly?" with "select markets only." Nokia also did not have any answers to other questions like "which carrriers have agreed to carry it" and the "cost of the mobile." Apart from this Elop was quoted stating Nokia is "working on" a better battery life, solid radio performance, better signal reception etc, Wall Street investors in a way are least bothered as to what will be done, rather they prefer what's already been implemented in the product. All in all Nokia is to blame completely for this collapse.
So is this good for Nokia in the long run?
Well we all know that major stock movements are generally due to emotion. Keeping that in mind we cannot completely forget Nokia's part in this as well. Nokia proved the basic message they intended from this gathering which is "Nokia makes good Mobiles." This is something everyone is aware of though. For Nokia to thrive in a long term perspective they have to ensure that Microsoft's Windows Phone turns out to be a hit. Microsoft (NASDAQ: MSFT) has filled smartphone lovers, like myself, with promises ever since the launch of Windows Phone 7. They've managed to incorporate a lot of features almost everyone of us wanted over the years.
The next step is for app and game developers to show the same love towards developing as they did with Apple's iOS and Google's Android. The major advantage both Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL) have is the fact that their App market is diverse and almost anything and everything related to mobile software is available. Microsoft has still a lot to prove when it comes to showcasing solid apps. I previously stated the Windows Phone does show a lot of potential but the final product is just not there. Microsoft has claimed Windows Phone 8 to be heaven for app developers. Steve Jobs was able to bring in the concept of an "App market" into the smartphone world, Google brought in the concept of an app market being open source and gave complete freedom to its developers to upload softwares according to their will with minimum pre-screening. Nokia's lifeline which is Microsoft at the moment should be able to compete in equal terms with the App giants Apple and Google if they want a shot at some serious revenue. Apple was able to take off with the iPhone primarily because of the software the iPhone was running on, which is the iOS. Fortunately for Apple, they have their own software team and do not rely on any other company for their mobile operating needs.
Google on the other hand has gone into both mobile phones and as well mobile operating systems. Google's "Android" is being used by a long list of companies these days, this mobile operating system has helped manufacturers concentrate solely on hardware. Google was not so succesfull with their launch of mobile phones, a lot of the models launched by Google failed to hit the targeted numbers and were forced to discontinue. Google though has been able to produce a very strong opertating system of mobiles and they do keep frequently updating these to meet and beat present standards. Thanks to Google's Android, companies like Samsung are doing well with regards to the smartphone market, a lesson Nokia should learn.
After the recent Keynote of Apple, things are looking very bright. This is what you ideally get from a strong presentation. Apple was able to bring a lot of local languages into Siri, this move alone ignited investors and thus you could see a 9% increase in their shares after the launch. Rumors of Samsung and a Chinese manufacturing company looking to sue Apple for this latest launch are floating in the air. How is Apple going to handle all this is something that's worth a watch. As far as the edge Apple has over Nokia is the fact that this presentation and the immediate increase in the stock value alone states a fact that Apple have impressed their crowd and things would definitely improve once the iPhone 5 is up for booking. A 9% increase for Apple and a 16% Dip for Nokia means a lot in investing terms. As far as investments are concerned now would be the perfect scenario for invest in Nokia, confusing right? Well Nokia's phone is going to be a sensation once it's up for grabs. Reviews and comments on youtube.com and other gadget sites and doing the advertisement for Nokia. A month from now Nokia would have announced the markets their entering and the prices, the new Lumia phones are already getting rave reviews.
All in all for Nokia to succeed and increase their share value they have to ensure that Microsoft's Windows Phone 8 is a hit. Microsoft being the pioneers in that they do would not come up with a product that is a complete failure. I'm pretty sure that they would put up a decent launch at least.
ceciljohn2002 has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Nokia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
