This Should Have Nokia Fans Jumping for Joy -- Right?

First, the good news: Nokia (NYSE: NOK  ) isn't just the leading manufacturer of Microsoft's (NASDAQ: MSFT  ) Windows 8 global smartphone market. According to a recent report from AdDuplex, it's absolutely destroying the competition. Combined with the Q4 announcement of 4.4 million Lumias sold, that should make even Nokia bears stand up and take notice. But with so many ongoing questions regarding the impact of Windows 8 in the smartphone OS market, does Nokia's resurgence even matter?

The envelope, please
As of April 4, the date of AdDuplex's report, Nokia was the manufacturer of choice for 80% of all Windows 8 phones in use worldwide. HTC was a distant second, holding 14% of the Windows phone market, and Samsung, with its limited Windows smartphone alternatives, accounted for 5%. A smattering of others, including Huawei, ZTE, and Acer, shared what little was left.

Nokia's dominant position isn't entirely a surprise. As the world's No. 2 phone manufacturer, and the first to go all in with Windows 8, Nokia was always going to be ahead of the pack. But 80% is a staggering market share.

Fools should also note the growth of Nokia's Lumia 920, its latest, greatest, and most expensive smartphone. The Lumia 920 has taken over the top spot of all Windows 8 phones worldwide, jumping from fourth place just a month ago.

With Nokia's earnings announcement slated for April 18, let's hope CEO Stephen Elop shares Lumia sales numbers specific to the China Mobile deal Nokia inked late last year. With 700 million subscribers, China Mobile is the world's largest wireless carrier; a good start there would certainly help to explain the jump in Lumia's position and position Nokia for further growth.

Internationally, Nokia dominates Windows 8 smartphone sales the way Samsung and Apple do in the U.S., with more than 90% market penetration in its top 10 markets. South America in particular loves its Nokia Windows 8 smartphones; four of Nokia's top 10 countries by market share hail from the continent, with Argentina clocking in at 99% market share for all Windows 8 phones in use. Impressive.

Now for some perspective
Windows Phone, while growing market share in the U.S., remains a distant fourth behind Google's Android, Apple iOS, and BlackBerry (NASDAQ: BBRY  ) , according to recent data from comScore. Android OS and iOS together own slightly more than 90% of the market domestically, and the story's about the same internationally. Nokia and Microsoft can only point to Windows Phone 8's movement in the right direction. Along with iOS, Windows 8 was the only operating system to increase its share of the domestic mobile OS pie the past quarter, up to 3.2% from 3% in November.

The battle lines have been drawn, and for mobile OS developers, that means the immediate objective is a fight for third place. Unseating Android and iOS will have to wait. Right now, BlackBerry's holding onto that position. With its new BB10 slowly but surely rolling out across various markets, it should be able to stop the bleeding of its global OS and smartphone market share. Still, declines in market share in the U.K., traditionally a BlackBerry hot spot and one of the first markets to get BB10, puts a damper on things for the company. If Microsoft's Windows 8 does surpass BlackBerry, Nokia will be leading the charge.

The investment opportunity
Nokia's 16% share-price drop year to date should be music to value investors' ears. Why? Nokia's shares have declined even after a strong, profitable quarter; its partnership with the largest wireless carrier in the world, China Mobile, could be an enormous boost to already solid Lumia sales; and its Nokia Siemens arrangement is paying off big time.

It would be easy to discount Nokia's dominance in the Windows phone OS sweepstakes, given Microsoft's small (but growing) market share relative to Android and iOS. But that would be a mistake. Lumia's sales growth and Nokia's ownership of 80% of the Windows Phone market are big steps in the right direction and shouldn't be discounted. Value investors in particular should take a good, long look at Nokia right now.

Nokia's been struggling in a world of Apple and Android smartphone dominance. However, the company has banked its future on its next generation of Windows smartphones, and early indications are good. Motley Fool analyst Charly Travers has created a new premium report that digs into both the opportunities and risks facing Nokia to help investors decide if the company is a buy or sell. To get started, simply click here now.


Read/Post Comments (12) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 10, 2013, at 6:56 AM, Videnak wrote:

    I would suggest to stop writing about NOKIA now. Lets wait till next week.

  • Report this Comment On April 10, 2013, at 10:13 PM, jeffreber44 wrote:

    Windows Phone OS is a dream to use when on a Nokia Lumia. Seems like a lot of people have noticed this. Earnings will most likely be better than last quarter and could propel the stock to $10.

  • Report this Comment On April 10, 2013, at 11:03 PM, TimKnows wrote:

    Do you know anyone with a Windows phone? I could never buy another Microsoft product.

  • Report this Comment On April 11, 2013, at 12:24 AM, Rockymarchino wrote:

    I got ONE and I will by another ONE when it comes in Aluminium!

  • Report this Comment On April 11, 2013, at 12:28 AM, Rockymarchino wrote:

    Microsoft IS Industy standard, face it. Lync OneNote Office Outlook... Do you TimKnows know anyone using that?

    Do you believe that it could be convenient to have it in your smartphone?

    Is Lumia a beautiful phone?

    I believe in larger market share, much larger.

  • Report this Comment On April 11, 2013, at 1:45 AM, lee654 wrote:

    Great News !Thanks Motley fool for the facts ! Special Free gift to all worldwide,go to Cristy Lane

  • Report this Comment On April 11, 2013, at 6:17 AM, Ahmad7 wrote:

    Sent from my Lumia Window Phone

  • Report this Comment On April 11, 2013, at 7:01 AM, bassman62 wrote:

    I have 2 Nokia 822's. Bought the 1st one for my 11 yr. old daughter. Of course, she loaded it with every froggy game and such that she could find... lol, and the thing works flawlessly. That was 3 weeks ago. I bought myself one about a week ago. These things are smooth and fast. Battery life is great. I had a Motorola Android 3 for over 2.5 years. Good phone, but glitchy from day 1. Love these new Nokia products! I see Nokia making a run from here on out.

  • Report this Comment On April 11, 2013, at 7:05 AM, hedgeshorthater wrote:

    I count 8 comments. So...my our are the guys who actually care about Windows Phone. got it.

    Every one else will pay attention to the other 98% of the industry.

    Msft has been at mobile for a decade. They aren't good at it. I've never seen anyone buy or use one.

    The only thing selling is their cheap one and margins are horrible on it. Msft will have to either look to buy bbry or give up in the coming 18 months.

    I don't say Nokia because they are essentially run by Msft now.

  • Report this Comment On April 11, 2013, at 7:51 AM, greenember wrote:

    I can't say that I know anyone at all that owns a Windows Phone. I at least know people with BlackBerry phones, and quite a few I might add

  • Report this Comment On April 11, 2013, at 4:34 PM, BlackBerryGreat wrote:

    Nokis is a dog. They are dead. Blackberry is the future.

  • Report this Comment On April 16, 2013, at 11:28 AM, cdgoin wrote:

    My family sports (2) Nokia 710s (WP 7.5), a Nokia 810 (WP8), a HTC 8X (WP8) and I have a Dell Venue Pro (WP 7.8). I know of at least 10 others that are friends of my daughters or sons that switched in the last 2 months to WP over android and iOS after being introduced to them. I'm sure teh news by the end of the year will be the strength of WP and BB10 over android and iOS. As they both improve market share due to the modern Os'. The older phones are still running various versions of Android, and iOs is dated. Android is winning due to cost, and saturation of the market, not due ot he experience. The Droid experience changes from phone to phone, OEM to OEM.. BB, and WP do not.

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