Nokia to Collaborate with Verizon - Analyst Blog
August 23 2012 - 1:15PM
Zacks
Nokia Corporation
(NOK) plans to partner with Verizon Communication
Inc. (VZ) to sell new Lumia phones based on
Microsoft Corporation’s (MSFT) Windows phone8
operating system.
If the two giants do collaborate,
it will be seen as a welcome news for Nokia Corp as it will have
three of the top 4 U.S. carriers under its stable, offering Lumia
handsets. For Verizon it will increase the number of smartphones in
its garage and reduce its dependence on Apple
Inc’s. (AAPL) iPhone and other Android-based phones.
Owing to stiff competition from
Apple Inc.’s iPhone and other smartphone manufacturers using
Google Inc’s. (GOOG) Android platform, the company
preferred Microsoft Corporation to develop Windows-based
smartphones. Earlier, on April 8, 2012, the Finnish handset
manufacturer partnered with AT&T Inc. (T) to
sell Lumia 900, the first LTE phone from Nokia. Furthermore,
T-Mobile USA became the first carrier in January 2012 to launch a
Lumia series of smartphones in the U.S.
Both AT&T and T-Mobile USA will
sell Lumia devices, which are based on Microsoft’s older generation
Windows phone7 software, with Lumia 900 being the only exception as
it runs on Windows phone7.5 software. Meanwhile, collaborating with
Microsoft hasn't been of any help to Nokia since Microsoft only has
a 3.5% market share, according to International Data Corporation
(IDC), while Android and iOS accounted for 68.1% and 16.9%
respectively.
On September 5, 2012, Microsoft and
Nokia are all set to unveil the new Lumia smartphone based on
Windows phone8 platform. Though Verizon intends to roll out the new
device later, we believe that if Windows phone8 OS lives up to the
expectations, tying up with the nation’s largest carrier will help
Nokia to gain a significant market share in the lucrative U.S.
market.
The current Zacks Consensus
Estimate for Nokia Corporation is pegged at a loss of 12 cents for
the third quarter 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%), but for 2013, the Zacks Consensus
Estimate stands at a loss of 1 cent with a growth rate of
96.55%.
Recommendation:
We retain our long-term Neutral
recommendation on Nokia. Currently, it has a Zacks #3 Rank,
implying a short-term Hold rating.
APPLE INC (AAPL): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis Report
MICROSOFT CORP (MSFT): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
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