Samsung's Electronics' new Windows-based smartphone,
unveiled recently, will hit Finish handset maker Nokia Corporation
(ADR)(NYSE:NOK) hard which will be launching its own smartphone running on
Windows in just a couple of days from now.
Nokia is launching its new Lumia phones on September
5, in partnership with Microsoft's new Windows 8 mobile phone operating
software.
Zacks Equity Research said in a note on Friday that
Samsung's smartphone will place it in direct competition with Nokia's Lumia
smartphones.
"Samsung became the first company to launch
smartphones based on Windows Phone 8 software and pipped developer Microsoft
Corp's biggest Windows Phone partner Nokia who expects to release its own
version in September."
"Additionally, Samsung also revealed a tablet
based on Windows RT, which is the tablet version of the Windows 8 operating
system. We believe that the South Korean giant is trying to reduce its
dependence on Google's Android operating system after it lost a crucial patent
battle to major competitor Apple."
Can NOK Hit $5
By this month? Find Out Here
Nokia lost its premier position as the largest handset
maker in the world to Samsung in the first quarter of 2012 and has been
struggling to play catch-up since then. As part of its strategy to gain
traction the company also ditched its own Symbian operating system and has
teamed up with Microsoft to develop Windows-based smartphones.
The Finnish company still makes the largest number of
feature phones which are the lower end of the segment. However smartphones are
what is driving the mobile devices market and Samsung and Apple have become
dominant players in this segment.
"It is expected that the success of Samsung’s new
offering will take some time as Windows Phone is still not the preferred choice
for customers," Zacks points out.
Data from IDC shows that Microsoft only has a 3.5
percent of the smartphone market share while Android and iOS accounted for 68.1
percent and 16.9 percent respectively.
"We believe that if Samsung can price it aggressively
the devices which are slated to release in the latter half of the year will
pose a major threat to Nokia’s own Windows Phone8 based offerings."
"Furthermore, on the back of its advanced
features it will elevate the expectations from Nokia’s Windows Phone, which if
it fails to meet will bring additional woes for the company."
Zacks has estimated Nokia to report a loss of 12 cents
a share for the third quarter of 2012 with a growth rate estimate of (393.06%).
For 2012, the Zacks Consensus Estimate stands at a loss of 38 cents with a
growth rate of (199.54%) while for 2013, the Zacks Consensus Estimate stands at
a loss of 1 cent with a growth rate of 96.67%.
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