What’s Not So Great
A lot of analysts in favor of Nokia believed that the company would be able to get back on the right track and that Nokia Corporation (ADR) (NYSE:NOK)’s smartphones needed a little more time. However, it has been a long time since Nokia joined hands with Microsoft Corporation (NASDAQ:MSFT), and since then the business hasn’t picked up well. Nokia currently faces threats from all the major smartphone manufacturers, especially Apple Inc. (NASDAQ:AAPL) and Samsung. Apple, along with Samsung, has done quite well in recent years in making a brand image and in creating customer loyalty. Therefore, it will be anything but easy to break Apple’s current market or to capture some of its market share, even though Apple has lost much of its market share to Android. On top of that, Nokia Corporation (ADR) (NYSE:NOK) now faces competition from the new and improved BlackBerry, which is using its own new BB 10 operating system.
Nokia’s core strength lied on its differentiated products for different types of audiences, including high-end smartphones and budget smartphones. Apple Inc. (NASDAQ:AAPL), on the other hand, focuses on a particular type of audience with its iPhone–the people who can afford it. Similarly, Research In Motion Ltd (NASDAQ:BBRY) also caters to the needs of mostly corporate individuals. However, BlackBerry did unveil some low-priced smartphones recently, based in its BB10 platform. While Nokia Corporation (ADR) (NYSE:NOK)’s Lumia business has been picking up, its mobile phone division, which is still a big part of the company, is headed towards a decline.
Will a Microsoft Deal Help Nokia?
Recently, there have been a lot of reports that Microsoft has been considering buying out Nokia Corporation (ADR) (NYSE:NOK)’s phone unit division. Even though the deal is still unlikely, this would help Microsoft Corporation (NASDAQ:MSFT) in entering into the smartphones business, as it would control both the software and the hardware. Microsoft has always been a software company, teaming up with partners who are involved in making the hardware. Recently, however, Microsoft did step up its game in hardware with its Surface tablet and might well be on its way to entering into hardware for smartphones. If a deal could be reached, then this would finally give investors something to smile about.
Apple and Research In Motion Ltd (NASDAQ:BBRY) make their own hardware and software, which might be the reason why the companies have been quite successful in the past. If a deal between Microsoft Corporation (NASDAQ:MSFT) and Nokia can be reached, then maybe the Windows 8 smartphones will finally pick up pace.
Conclusion
Even though Nokia Corporation (ADR) (NYSE:NOK)’s Lumia sales have been growing, its overall business is declining and the company’s future still looks uncertain. Nokia has never been able to get back on its feet after losing much of its market in the past couple of years, mainly because of the success of Apple Inc. (NASDAQ:AAPL)’s iPhone and Google Inc (NASDAQ:GOOG)’s Android-based smartphones. Even though Apple has been losing its market, it doesn’t look like Nokia will get back on top any time soon. In the long run, however, if Microsoft Corporation (NASDAQ:MSFT) can continue to improve its Windows Phone OS and gain a decent market share, then I don’t see why Nokia won’t be able to capitalize on the opportunity. Nokia Corporation (ADR) (NYSE:NOK) finds itself in a very similar position as BlackBerry, as both companies are struggling to get back on top in the industry once again. Research In Motion Ltd (NASDAQ:BBRY) has gambled its future on the BB10 platform, while Nokia hopes that the Windows Phone might finally be the factor which could help the company get back on track.
Yasir Idrees has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple Inc. (NASDAQ:AAPL).
The article Where Does Nokia Stand? originally appeared on Fool.com.
Yasir is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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