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September 10, 2010Nokia losing out to Apple and Google
Nokia the Finnish Mobile Leader has been facing reverses on all fronts since the past 2 years.Technology Game Change Apple has totally changed the Mobile Market with the introduction of the “iPhone”.Google has quickly followed with its Android Operating System proving to be a very strong challenger to Apple’s iPhone dominance.Motorola,Samsung and HTC have ridden Google’s coattails to resurrect themselves in the smartphone market to the detriment of older leaders like Nokia and RIMM.In fact I had earlier written that RIMM and Nokia should merge to combat their diminishing influence in the Mobile Market to survive.
Nokia has also been losing out in its Indian Fortress to local players and Samsung.It has shuffled divisions and management once too often without any change in its downward trajectory.There was little reason to think that Nokia could turnaround its descent into obsolence in the face of stiff competition from Apple and Google.However new product introductions,partnerships and a radical change at the very top suggests that Nokia might have a good chance of turning around.
But Things are Changing
For Nokia Things seem to be Changing in the Following Ways
1) New CEO Stop from Microsoft – Nokia has appointed a new CEO Stephen Elop from Microsoft who comes from a non-Finnish and non-Nokia background.This is a first for Nokia and a great move as the previous CEO Olli Pekka had overseen a huge 70-80% fall in the company’s value.
2) N8 – Nokia is introducing a new Smartphone N8 whose features and price points would suggest that it would be a big hit.Its earlier smartphones like N900 have failed miserably compared to Blockbuster Phones from the Competition like the Motorola Droid,HTC Incredible and the new Samsung Galaxy S.However a fantastic 12 MP camera,AMOLED Screen,HDMI connectivity would make you think that N8 should be a runaway hit at price point of $500-550.
3) Meego – Nokia is introducing a new software platform Meego in collaboration with Semiconductor Leader Intel which will be based on the Linux Operating System like Android.Nokia’s earlier OS Maemo is being put in the cold storage while Sybmian will still be used in some devices.Meego has been progressing well and it could rival the developer community of iPhone OS and Android in the future.Today a Leading Operating System is a necessity for a smartphone vendor as 2-3 Operating Systems edge out others due to the strength of its developer community and Apps
Summary
Nokia is currently trading at extremely low valuations of 12x forward earnings and around 0.7x Sales which is extremely low by Technology Sector Standards.If the company can bring back the pizzaz behind its Smartphone lines,sell of its Nokia-Siemens unit the stock could easily double here.Nokia has one of the strongest brand names in the planet with great manufacturing and excellent global distribution.All it needs is a bit of Apple like Magic to return to its glorious days.
3 Comments
I believe Nokia should officially announce to support upgrading N8 to meego. That would greatly help the N8 sales. Without that, I foresee the sales number of N8 will be just so so. Given the meego product coming in just few months, who would spend half kilo to buy a soon-to-be-out-of-date product?
Nokia Should try Twin Sim with TV mobile phones
[…] Hardware – N8,Software – Meego Operating System with Intel,AMD and Management – Elop from Microsoft.However the changes don’t seem to be working as of now.White Box Mobile Phones from China […]