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Just as reported in August, Microkia is indeed hooking up with Big Red.
Struggling Finnish smartphone maker Nokia (NYSE: NOK ) hasn't had a device on Verizon's (NYSE: VZ ) wireless network in three years. Meanwhile, Verizon hasn't launched a Microsoft (Nasdaq: MSFT ) Windows Phone device since May 2011, the HTC Trophy. Both of these droughts are now coming to an end.
Nokia has announced its joining Verizon's network just in time for the holidays, with its Lumia 822. That's the more affordable little sibling to the flagship Lumia 920 that was announced in September. It will price at $100 on contract and be the first device to run the new Windows Phone 8 platform on Verizon's network, an important win for Microsoft since Verizon is the largest wireless carrier by subscribers.
Nokia has been cozier with AT&T (NYSE: T ) lately, launching the Lumia 900 exclusively on Ma Bell's network earlier this year and following up with the Lumia 920 this fall, again exclusively for AT&T.
North America is one of Nokia's weakest geographies, and the company continues to work aggressively to turn the tide. Last quarter, device revenue declined 72% sequentially to $46.5 million, while total mobile device units to the geographical segment were also cut in half to 300,000. The company attributed this drop to "lower operator and distributor demand for Lumia" (link opens PDF) in addition to the transition to new devices running Windows Phone 8.
However, I wouldn't expect Verizon to push Nokia devices as aggressively as AT&T will. Not only is the Lumia 822 not a high-end flagship like the Lumia 920, but also AT&T continues to feel the brunt of expensive Apple (Nasdaq: AAPL ) iPhone subsidies more than its rival. Last quarter, 77% of AT&T's smartphone unit sales were iPhone activations, compared to Verizon's 46%. Ma Bell has more of an incentive to diversify its smartphone base away from pricey iPhones.
Microsoft, Nokia, and Verizon are about to hook up, but will it all end in heartbreak?
It's been a frustrating path for Microsoft investors, who've watched their company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.