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Expect Something Big from Nokia after the Microsoft-Nokia alliance

Muhammad Bazil

Muhammad Bazil

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News on the Nokia and Microsoft alliance that came to light early last year has since gone viral. In the wake of the news, a lot was said. Some speculations leaned towards the negative while some spelled a bullish wave. In person, I am inclined to stick with the latter. The Microsoft-Nokia alliance extends unimaginable opportunity for Nokia (NOK).

Nokia and Microsoft (MSFT) have been brought together by the same primary motive; to make up for recent deplorable performance. Chances of success are therefore higher. Similarly, the two players will bring their best strategies to the table and look for a way forward.

Biggest challenge

There is, however, one big challenge that falls in the path of this alliance: dominance by Google (GOOG) and Apple (AAPL). These two players extend a shrewd fashion of competition and dominance. In particular, they have taken over the reins in the smartphone industry. Recent IDC research findings couldn’t say less — the two juggernauts control up to 82% of the entire smartphone market. Some people have even dubbed the case a "smartphone duopoly." Nokia has an incredibly uphill task. If it is not the iPhone fanatics who can’t settle for anything other than an iPhone, it is the brimming numbers that Android manages to gather.

Samsung is also a force to reckon. After all, it did manage to take the lead in smartphone sales from Apple. This is no minor achievement, especially after considering the immeasurable effort that Apple invests in marketing and maintaining customer loyalty. On top of that, the market is intense after the release of the Samsung Galaxy S3. Mind you, the Galaxy series has since grown to be a house hold name. Here is the funny thing — all Samsung Galaxies have an Android platform. This then again brings Google into the picture. This means that the global smartphone market is pretty much controlled by Google and Apple — the big duopoly!

Can Nokia pierce through these eclipsing numbers? On the short run, definitely not; changing such numbers overnight is next to impossible. The long haul, however, avails some favorable prospects for Nokia.

Shred of hope

Sometimes the presence of weakness is the ultimate display of potential strength. I am bullish about Nokia and in particular its prospects after the Microsoft alliance. Microsoft currently has many pitfalls and this spells hope for me. Ironic, isn’t it? Look at it from this point of view. Microsoft hasn’t fallen despite the pitfalls; what if it patches up its loopholes?

One big problem that I believe will be soon addressed in the Microsoft camp is the software updates for earlier Windows versions, in particular Windows XP. As per this year, 51% of consumers use Windows 7 while 27% use Windows XP. This shows that Windows XP is not absolute. Blooming heck, it even has more users than Apple’s Mac. To the disappointment of many, Microsoft has given more attention to Windows 7. The Internet Explorer update for XP still lags behind. Nonetheless, I am confident that something will be done about the issue.

If Microsoft manages to address this pressing issue, it will bolster confidence levels in consumers and presumably create grounds to lure consumers into using Nokia phones that operate on a Wp7 platform.

The new and improved Bing map services are also likely to bring in some numbers, in both consumers and monetary. This ramped-up service currently implements a standout geo-coding system.

Enhancements

Imagine a phone that can allow you to listen to music while taking a shower? Future Nokia Lumia versions and the Nokia 808 PureView will have this enhancement. The so called hydrophobic technology has been designed to create a bouncing effect that repels water. This is bound to please consumers and will possibly dig into Apple’s and Google’s numbers. In my opinion, Nokia will use the opportunity as bait and in the process avail a more appealing product for its consumers.

At the end of March, Jamie Townsend who works as an analyst at Town Hall Investment Research, made clear his bullish outlook on Nokia. At that time, many deemed his viewpoint as farfetched. As per now, it is making perfect sense. The fruits of the Nokia Microsoft alliance are slowly coming into the picture. Expect much more from Nokia in the long haul.

About the author:

Muhammad Bazil
Muhammad Bazil is a financial journalist and editor for a variety of websites, public policy organizations, and book publishers. He has written hundreds of published articles and blog posts on topics including budgeting, credit management, real estate and investing. His articles have been featured on the homepage of Yahoo!, MSN and numerous local news websites.

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Comments

fekafiemd
Fekafiemd premium member - 1 year ago
The Nokia 900 has great reviews on Amazon. In addition, Nokia is the number one phone in the World and number one in China. Dominance in the USA does not necessarily dictate dominance in other markets. If Nokia and Microsoft can make Skype work for free on its phones and network (for free calls to anywhere in the world), then they will have a fighting chance here and abroad. The winning tools are present at Nokia and Microsoft, leadership will dictate their success.

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