Nokia Corporation (ADR) (NOK), Microsoft Corporation (MSFT): Could This Be a Game-Changer?

Like Nokia Corporation (ADR) (NYSE:NOK), Microsoft Corporation (NASDAQ:MSFT) is also on a learning curve and is striving hard to bring improvements to its OS. Windows Phone 8 is leaps and bounds better than Windows Phone 7, which has contributed positively to the growth in Lumia sales. Microsoft recently announced that it would extend the support lifecycle for Windows Phone 8 from 18 months to 36 months, which is another indication of the company’s commitment to the platform. As an investor, I hope that Microsoft brings out its Windows Phone 8 GDR3 update as soon as possible, which will reportedly support 1080p HD resolution and quad-core processors, thus giving Nokia devices more ability to compete with the likes of HTC, Apple, and Samsung.

In my view, the Microsoft Corporation (NASDAQ:MSFT) factor gives Nokia Corporation (ADR) (NYSE:NOK) a significant advantage over BlackBerry because it gives Nokia the opportunity to focus on hardware while allowing its partner to worry about software. Therefore, I believe that BlackBerry will find it even more difficult to ramp up its BB10 sales.

Foolish take

As an investor, it is easy to get carried away when a company shows off a new product, hoping that it will somehow annihilate competitors with jaw-dropping features. I believe that something similar is happening with Nokia Corporation (ADR) (NYSE:NOK) and the Lumia 1020. In my opinion, the Lumia 1020’s impact on Nokia’s turnaround prospects will be rather modest. With Lumia sales growing, feature-phone sales stabilizing, and Nokia Siemens Network delivering excellent operating margins, the overall picture looks good for Nokia. This can only be good news for Microsoft Corporation (NASDAQ:MSFT), as strong Lumia sales would help the software giant regain its foothold in the computing world. For BlackBerry, however, I believe that it is going to be an uphill struggle to regain even a fraction of its lost dominance. I recommend both Nokia and Microsoft as a “buy,” but BlackBerry as a “hold.”

Zain Zafar has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft.

The article Could This Be a Game-Changer? originally appeared on Fool.com.

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