Nokia Goes as Windows Phone System Goes
If you have not kept up on certain mobile phone manufacturers like Nokia (NOK), you may have not realized that this morning before the market opened, the company announced its first-quarter numbers-- it was way off. While analysts were expecting a loss of about 10%, the company announced a 20% drop in revenue compared to the first quarter of 2012. On the bright side the company’s high-end Lumia smart phone increased sales by 27% manufacturing 5.6 million phones as compared to 4.4 million in the fourth quarter of 2012. But this could not save the company as revenue plummeted in its “device and services” and “Nokia Siemens Networks” divisions.
There are plenty of places around the world that Nokia low cost phones are still very popular, like South Africa and South East Asia. I am sure the company will be able to pick up business in these areas on the low-end phone market, but I believe that the future success of the company will be directly tied with its venture with Microsoft (MSFT) and the Windows phone. This is what sets the company a part, this is what allows the company to toot its own horn.
If the company is going to succeed it is going to be because the Windows phone is going to knaw into the market share of the android and the Apple (AAPL) iOS operating phone systems. The challenge is not small. While Nokia sold 5.6 million smart phones in the first quarter, that pales in comparison to Android and the iOS phone sales at 61.6 million and 36.9 million respectively. Are you interested Nokia? Keep an eye out on the performance of the window phone system, this is good to be the key to their long-term success.