Time for Nokia's (NOK) Elop Winding Down; WP8 Bet Now Set to Take Shape
7:45 AM ET, 09/19/2012 - Street Insider
It's been long known that Nokia (NYSE: NOK) is facing pressure from all around, competitors and investors alike. However, analysts are now starting the clock on Nokia -- and CEO Stephen Elop -- giving the set until the first-quarter of 2013 to prove that its turnaround is shaping-up well.
Nokia held a special event on September 5th for the introduction of its new Microsoft (Nasdaq: MSFT) Windows Phone 8 (WP8)-based devices, the Lumia 820/920 series. Needless to say, the event failed to inspire positive investor sentiment. The Lumia looked like an upgraded version of the 800/900 series, which run on Windows Phone 7...an OS that isn't upgradeable to WP8.
Elop took the reins of Nokia in 2010 and in February 2011 he said that Nokia would drop its Symbian operating system in favor of Microsoft's WP7 operating system. The move pressure shares, with WP7 device sales lagging far behind those of Google (Nasdaq: GOOG) Android-based devices as well as Apple's (Nasdaq: AAPL) iPhone. line.
At the time, he promised a two-year transition, which will expire in early 2013.
To date, the Lumia has been a tepid seller, moving about 4 million units in the latest quarter. By contrast, about 6 million Symbian devices were sold in the period, which is surprising given that Nokia hadn't launched a new Symbian device in 12 month to June 2012.
Though Microsoft has expressed interest in creating a solid ecosystem around its upcoming Windows 8 operating system, including clean integration with WP8, Nokia will be facing competition not only from Android devices, but also Apple's new iPhone 5. The Apple device is known for selling millions upon millions in its first and second quarters of availability. Last Monday, Apple announced that pre-orders for its newest iPhone topped 2 million units, leading some analysts think opening weekend sales will exceed 10 million units.
One analyst -- quoted by Reuters today -- mulled that Nokia should also consider adopting Android for cheaper versions of its smartphone to retain share in emerging markets..
For the upcoming quarter, expectations should remain low for Nokia given that not many folks are going to start using a device that will be obsolete in a few months. But, many should be getting a little flavor of how performance for the holiday season has been sometime in February or March, which quarterly results will be announced. For now, investors will look on to October, when third-quarter numbers will be released.
Shares of Nokia are indicated lower Wednesday morning. |
