Nokia’s Move - Fire On All Cylinders

Jyoti is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

When almost all the analysts had written off Nokia (NYSE: NOK) and said that they did not deserve to be in this war of smartphones, they came out with their best weapon yet: the Lumia 920 and 820. The Finnish-company had gone through tremendous turmoil, which resulted in the fall in their share price to as low as $1.64 in the last year. But the spirits of the company were always high and they bounced back with a good performance in the last quarter.

The Lumia 920 has been considered by many analysts as the best smartphone of 2012. Apart from an attractive set of colors to choose from, the phone comes with many unique and distinctive features compared to other smartphones in the market. Running on Windows 8, it has a smooth multi tasking and a multi threading feature. It also has a very high camera quality and possesses inductive charging (i.e., it can be charged by being placed directly onto a charging pad). The new super touch technology allows people with long fingernails or gloves to manipulate the screen. This new super sensitive touch technology is the biggest leap forward for capacitive touchscreens since multi-touch gestures were introduced.

In short, Nokia is trying to fire on all cylinders. The moves are quite strategic. In countries like India they have introduced the low budget Asha Phones, understanding the needs of the market, and in the US they are targeting the premium market with the Lumia 920 and 820. In a first for the smartphone world, Nokia has also introduced a 3D printing Development Kit for its Lumia 820. The 3D kit, available on Nokia's site, includes mechanical drawings of the back shell of the Lumia 820, which will allow anyone lucky enough to have a 3D printer to print their own smartphone covers.

Now it will be important to see how Apple (NASDAQ: AAPL) will combat this. Shares of the company have dropped drastically over the last few months and managed to pick up during the Thanksgiving season, which can be attributed to the boost in the sales of the iPhone 5. They are considered to be one of the most innovative companies across the globe, but the lack of innovation along with some faults in the iPhone 5 has led to its decline. With Nokia getting aggressive, we expect a solid response from Apple in the coming few months in order to survive in the smartphone battle.

One of the most important markets for Apple and Nokia is the growing Chinese market. The huge population and the growing needs is something that both these companies will look forward to. But as of date, the biggest pie of the Chinese market has been taken by Google’s (NASDAQ: GOOG) Operating System - Android. Along with Samsung and few other OEMs they have a market share as high as 17 percent. The reason why Android is so famous is because of its huge application database. It is also an open system, giving users wider options to experiment with, as compared to Apple’s iOS.

Nokia finally did come out of its age-old Symbian software and opted for Microsoft’s (NASDAQ: MSFT) Windows 8 Operating System, launching a fully fledged battle with Google in the Mobile OS market. They have deals with Samsung, Nokia, and few other companies that will carry the Windows 8 OS. In its early days itself they have managed to capture a market share of 2.6 percent. But to compete with the giant Google, which has a market share of over 65 percent, will be a daunting task.

These are still the early days of recovery for Nokia. But per the last financial report where they managed to sell over 4.4 million Lumia devices and 86.3 million smartphones total, this is quite a ray of hope. The reports were better than expected. They are now moving in a very strategic way and slowly understanding the need of the changing smartphone world. But in the year 2013, sales of smartphones are expected to grow only by 1.5 percent, one of the slowest in the last few years. This means that they need to find out more ways of capturing the maximum market share and grabbing all the opportunities available in all possible corner of the world if they want to survive in the heating battle.


jyotiadvisor has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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