Wednesday, September 5, 2012

Will Nokia be Able to Rise Again to the Top with Its New Phone (NYSE:NOK)

Upgraded versions of Windows operating system from Microsoft Corporation(NASDAQ:MSFT) have always been highly anticipated, but till date, the stakes have never been so high. Microsoft is about to launch Windows 8 and its success will have a huge bearing on the company’s cellphone partner, Nokia Corporation (ADR)(NYSE:NOK). Analysts have gone so far as to say that if the software is as compatible and robust as stated by both companies, then it is likely to secure the position of the No. 2 operating system, after Android from Google, and will surge past iOS from Apple.

Chief Executive Stephen Elop, who is a former employee of Microsoft, has channelized all his experience and strategies into the development and launch of two new Lumia phones that will run on Windows 8. The older models running on Windows 7.5 can’t be upgraded though. A failure will cause irreparable damage and the future of the company will be in jeopardy.

Nokia has already faced huge losses when it made the transition from Symbian to Microsoft in February 2011. The sale of Lumia phones did not help too much as the figures in June showed a 19% drop from last year and the company’s debt ratings were given a junk status.

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To help escalate sales of the new phones, the prices of some older Lumia models might be slashed. Security and encryption features have also been revamped in order to combat competition from Research In Motion’s Blackberry phones. Jo Harlow, the Nokia executive vice president in charge of the company’s smartphone business is positive that enhanced visibility of the platform will surely lure customers.

Ms. Milanesi, the Gartner analyst, however states that launching a smartphone that uses state-of-the-art technology will not be enough for Nokia. To secure its position as the cutting-edge numero uno brand, they will need to have a solid hardware support system. Francisco Jeronimo, an analyst at International Data Corp. in London believes that a Microsoft-Nokia combination will do wonders for both companies and help to catapult the latter into the league which they had once dominated. He went on to say that Samsung might focus solely on Windows and might even switch from Android, provided Windows 8 performs according to expectations. 

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