One of those partners is AT&T (T) who is helping launch the Lumia 900 in America. According to Jeff Bradley, AT&T’s senior VP of devices, the launch will be greater than any they have ever done, including that of the Apple iPhone. The company is confident that when people walk into an AT&T store, they will specifically be looking for the Lumia 900.
Nokia and AT&T worked together in an effort to train store employees to sell the phone aggressively. But they are not alone: Microsoft (MSFT) has partnered with the two as a platform provider. By the time of the official launch on April 8, the Lumia should be forced down our throats through every television channel and radio ad.
Customers new to AT&T can acquire Nokia’s Lumia 900 for free. This type of price point can significantly hurt companies like Sprint-Nextel (S), which is already challenged by competitors’ low hardware prices.
Although new AT&T customers will find themselves with a free phone, Nokia is aiming to sell the Lumia 900 to existing AT&T customers who have smartphones already. According to Nielsen research, that is approximately 50 percent of cellphone owners.
Stealing Android and iPhone users will not be an easy chore, however. Especially considering that Apple (AAPL) is the world’s largest maker of smartphones. And the most widely distributed operating system for mobile devices is Android. So in short, Nokia — with help from Microsoft — is taking on Apple, Android and all other smartphone makers. Seems impossible, doesn’t it?
Maybe not. I am taking cues from the enthusiasm AT&T is offering with this launch. Remember how it guarded its relationship with Apple? All other smartphones took a second seat. Now the company is willing to not only bring in a foreign phone, but to promote it like crazy.
There is a secret cheerleader behind the potential success of the Lumia 900. Nokia tends to get their panels from Samsung Display. Although they are not expected to see much benefit from the Lumia, they use technology from Universal Display (PANL). Universal Display gets compensated by the pound when they provide materials to Samsung. That means that if the Lumia 900 sells bountiful units, Universal Display profits. Keep an eye on the Lumia 900 success within the month of April. If it looks optimistic, consider grabbing some PANL as well.
What about Blackberry?
Those committed to their Blackberries would be blind to ignore that its manufacturer, Research in Motion (RIMM) has seen better days. A steep decline in sales last quarter forced RIM to review its strategy, which included the possible sale of part of the company.
What used to be a Wall Street favorite is now an embarrassment. In the past year, shares have fallen over 60%. And in the past four years, market cap fell by over $70 billion. Although there have been numerous management mistakes, its greatest error was underestimating the success of the iPhone and the Android powered smartphones. By the way, Nokia and Motorola (MMI) also underestimated the success of the two. The touchscreens that Apple and Android offered changed how we would look at smartphones forever.
The keyboard may have been missed on the iPhone at first, but consumers got used to it: a prediction RIM failed to see. RIM thought that its core customers (business customers) would need a keyboard. But they were wrong. Many business customers took to the virtual keyboard very well. Other features that Android phones and iPhones offered while RIM ignored were quick browsers, extensive memory and cameras. Surprisingly, RIM management deemed those features unnecessary. I cannot help but chuckle when I think of all the photo apps enjoyed by iPhone and Android users.
Another RIM failure was its high cost for apps. It never dawned on the company to offer low-cost or free applications until it was too late.
RIM was also ignorant to its corporate customers when those customers began to offer secure mobile email to their employees if they used iPhones or Android phones. RIM management seemed to have a comical sense of optimism like an ostrich who buries its head in the sand when trouble approaches. You cannot help but question their management structure when considering these ridiculous errors.
Going forward, RIM plans to stop developing consumer-focused content and focus instead on working with partners to provide the content. RIM is also focusing more on government and business users again, as opposed to individual consumers.
Unlike Nokia, RIM has little going for it. Nokia has Microsoft behind it and Motorola even has Google behind it. RIM has no support behind it. Its phones are too expensive and its CEO lacks ambition and realism. RIM is not a threat to Nokia.
It is easy to love Apple’s iPhone. But as a user, I know the frustrations associated with it. Although minor, they may be enough to at least get me into the store to look at Nokia’s Lumia 900. If this is how other consumers think, I have to be bullish with my outlook for the stock. At $5 per share, I am willing to take the risk.
About the author:
I fundamentally analyze every business from the top down.
In my personal life, I have a strong Jewish faith and enjoy playing Scrabble and entrepreneurship.