A Foolish Week of Telecom

Just when Nokia (NYSE: NOK  ) should be readying itself for its really big show next week, it now finds itself in the emergency room as doctors try to pull the knife out of its back -- the one Microsoft (Nasdaq: MSFT  ) just shoved in.

I'm referring to Samsung, as it has become the first phone maker to announce a smartphone using Microsoft's latest mobile OS, Windows Phone 8. Nokia had been counting on being the first with that claim, and the telecom world had been focused on the company's expected announcement on Sept. 5.

Samsoft?
Is Samsung throwing Google under the bus now that it has lost a major U.S. court battle with Apple (Nasdaq: AAPL  ) regarding patent infringement? The South Korean company is not only making an apparent shift in focus from Android-powered devices (as shown by the Windows Phone 8 announcement), but it is now putting its money on tablets powered by Microsoft 's Windows 8.

Samsung's Android-powered tablets didn't help the company take much market share away from the iPad, which has a 68.2% slice of tablet sales. Samsung's share was only 9.6%.

Samsung's explanation: The company is "committed to offering more choice based on Windows 8 platform for consumers," according to a Samsung statement.

What to do when the chips are down?
It should come as no surprise that smartphone sales are growing strongly, and feature-phone sales are dying as a result. According to research and analysis company IHS, smartphones will account for 54% of worldwide handset sales by next year, and the feature-phone share will only be about 28% by 2016.

Much ado has been made about the dire need of mobile carriers to get hold of as much wireless spectrum as they can. But a spectrum shortage is not the only bottleneck the smartphone industry will be facing. Apparently, the chips needed to make the mobile broadband devices just may not be available to meet the expected demand.

Qualcomm (Nasdaq: QCOM  ) , a major maker of key chipset components used in the iPhone 4S and of processors used in other mobile devices, recently expressed a concern about meeting the needs of its customers. CFO Bill Keitel recently spoke at an investment conference and told the audience the company was "disappointed that we can't meet all the demand customers have on the time frame they have placed on us."

This shortage is a classic good news/bad news situation. The good news: Qualcomm is at the forefront of a shift to 28-nanometer technology (for smaller, faster, cheaper chips). The bad news: The process for making these chips is not yet as streamlined as it should be. I'm sure that will eventually be solved ... just in time for an even newer technology to impose its own production problems.

Chipmaker Nvidia (Nasdaq: NVDA  ) is not affected in its mobile processor business yet, because it's still using 40-nanometer technology.

Crying "Fire" in a crowded tablet market
"The Kindle Fires are gone! The Kindle Fires are gone!"

It seems that there are no more Kindle Fires to be had – from Amazon.com, at least. They're all gone. Sold out. No more. Nada. Zip.

But analyst Jeff Orr of ABI Research thinks the Kindle Fire shortage is just a case of "planned obsolescence," a ploy to stoke speculation among industry watchers that Amazon is planning to announce a new Fire at a planned Sept. 6 company event.

"Who knows if Amazon really ran out of its top ... selling digital devices the week before announcing new ones? Orr asked.

If you really want a Kindle Fire, however, Amazon will be happy to direct you to any number of resellers willing to sell you a used or refurbished model.

There will be a number of announcements next month, including one by Apple rumored to be on Sept. 12, expected to be the introduction of its latest iPhone . As the company that basically wrote the smartphone OS rulebook, its iPhone is still the device that all other phones aspire to be like. To get the full scoop on one of the preeminent names in technology today, grab your copy of the Fool's new premium report on Apple. It comes with a full year of updates, as well as an overview of the must-know opportunities and threats for every Apple investor.

Fool contributor Dan Radovsky owns shares of Nokia. The Motley Fool owns shares of Qualcomm, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of NVIDIA, Apple, and Microsoft, creating a bull call spread position in Apple, creating a synthetic covered call position in Microsoft, and writing puts on NVIDIA. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.


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