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Microsoft Has to Hate Nokia

Microsoft's (NASDAQ: MSFT  ) apparently hoodwinked Nokia (NYSE: NOK  ) into backing another of its crazy Windows-fueled dreams.

Sources are telling The Verge that the Finnish handset maker is going to launch a Windows RT tablet on Sept. 26. The tech blog reported this earlier this month, but yesterday it offered up some more details on Nokia's doomed gadget.

We're not talking about Windows Pro, the mobile operating system that at least runs PC programs. Windows RT is the scaled-back platform that Microsoft is hoping takes off despite a lack of hardware and developer support.

There's apparently a lack of fan support, too.

Industry watcher IDC reported earlier this month that just 200,000 of the 45 million tablets shipped during the this year's second quarter -- or 0.5% -- were Windows RT devices. There's a reason why Microsoft slashed the price of its own Surface RT tablet by as much as 30% this summer.

Nokia's a bum magnet, but that's no excuse for following Mr. Softy down this downward spiral.

Yes, Nokia's desperate. Revenue's sliding, and profitability's been spotty. Microsoft's paying Nokia good money to support Windows Phone, but at some point this debasing has to end. The Lumia line of Windows Phone smartphones has been marginally successful, but there's no way that this is going to work.

The scariest thing is that The Verge is hearing that the new tablet -- fittingly slapped with the codename of Sirius, the Dog Star -- will be priced comparably to Apple's (NASDAQ: AAPL  ) iPad.

Yes, the proposed specs are impressive, surpassing what Apple currently has on the market in many ways. However, wasn't pricing the Surface RT at similar price points to the iPad what ultimately did it in? The tablet war is one that's being won on platform -- not spec sheets. Didn't Nokia learn from its sugar daddy's mistakes? Microsoft had to take a $900 million charge in its latest quarter because it overestimated the appeal of Surface tablets.

More importantly, even Apple isn't what it used to be. In the same IDC report, Apple's share of the tablet market has contracted from 60% to 32% over the past year. The mass market is gravitating to even cheaper Android tablets that have the developer support lacking with Windows RT.

Nice job with the Sirius codename. Nokia used to be a star. Now it's just a dog.

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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 August 27, 2013, at 11:16 AM, GameBot wrote:

    Most of this is simply nonsense.

    RT is much more than a "scaled down" version of windows, it is windows in a sandbox, it is windows virus free and managed for the consumer.

    But that would be too balanced and would not make a good story.

    In fact the only real point of this is that NOK might (note they have not released pricing and the verge is hit and miss on this type of thing) be over priced.

    So what is with the silly cheap headline ref "hate"?

    Really, why stoop to cheap headlines to get clicks?

    For balance, let us note that Nokia it the only company selling any kind of volume for windows phone, and as such we can be sure MSFT does not "hate" them.

  • Report this Comment On August 27, 2013, at 11:30 AM, LawrenceDiaz wrote:

    Yahoo should not allow Motley Fool post. Most are just attention grabbing headlines and no substance articles to sell their product.

  • Report this Comment On August 27, 2013, at 11:35 AM, fwe43 wrote:

    QUOTE " Lumia line of Windows Phone smartphones has been marginally successful, but there's no way that this is going to work."


    First of all I don't even know what the hell the author means by that and second of all if he really is implying that Lumia phones won't ever be a "real" success he's out of his freaking mind.

    This article is complete drivel. Total trash.

  • Report this Comment On August 27, 2013, at 12:00 PM, will1946 wrote:

    Everyone is entitled to his opinion, I guess.

  • Report this Comment On August 27, 2013, at 2:11 PM, lionbon wrote:

    What pains me is that I'll stoop low to respond to this 'Microsoft hate based Article'

    The 'Hate' in the title is unwarranted and not articular facts to support that caption.

    The Ipad had less than 1000 apps when it started and 'The Fool' columnists never claimed it had no developer support. Same goes for Android tablets. There are now well over 115,000 apps for Windows RT and this writer claims no developer support. The wrter of this article must be one of those Apple fanboys or fandroids who want to see Microsoft's tablets die in infancy. Nokia has proven everybody wrong. The Lumia line has surpassed IPhone in sales in many countries (Europe, Latin America, Asia) and has great momentum. The Sirius windows Tablets will piggy back on the momentum. Microsoft unified cross platform strategy will win out. No amount of negatives from Microsoft haters like this Motley Fool's writer will stop that. I have IPAD and IPhones, but I spend more time with my Lumia 920 and 1020 and Samsung Ativ tablets than I do with my IPhone, Ipad and Galaxy offerings. Microsoft's new offerings are just so refreshing, it's like finding a new super sexy girlfriend and loving life all over again. I speak the truth. Before you crucify Microsoft's new offerings. give them a try or two..You will not be disappointed. Go Nokia.

  • Report this Comment On August 27, 2013, at 3:54 PM, badgerzilla wrote:

    I don't own any Nokia stock so I don't care what happens to Nokia. I do own Microsoft stock though and I believe that Ballmer was spreading Microsoft too thin with a lose in focus in their money making business, Office, Azure and Windows. Microsoft is losing a lot of money in the consumer space and that is why their stock is sluggish. I get a few thousand in dividends a year from Microsoft. Had my dad of bought me Apple when he purchased my Microsoft stock, I would be a millionaire by now. That's my problem with Microsoft. I would sell it myself but it's in a trust so I get frustrated and blogging is the only outlet.

  • Report this Comment On August 27, 2013, at 4:09 PM, TheDumbMoney wrote:

    I just don't understand why these companies are so stupid. I just don't understand why they have no grasp on the fact that they cannot hope to compete with Apple except on value, which is how Android/Google competes. They have no brand cache in this space. They cannot hope to attain the margins Apple attains (and even Apple's margins are shrinking). NOBODY, and I mean nobody, is going to buy a Surface or this thing for anywhere near what they will pay for an equivalent iPad. NOBODY. (Okay, not nobody; apparently 0.5% of the market will, but hey, intelligence is a bell curve, what can I say.) It is simply unbelievable how something could be so obvious to the entire tech commentariat from day 1, and yet be over the heads of the executives at these companies who are in charge of pricing the products. It speaks to a whole corporate culture that is clearly more filled with yes-men and/or wishful dreamers than it is with people who ruthlessly evaluate facts, facts, facts. Unbelievable.

  • Report this Comment On August 27, 2013, at 5:36 PM, ahangara wrote:

    Extremely stupid title. What a cheap way to get more clicks....

  • Report this Comment On August 28, 2013, at 12:36 AM, DZPM wrote:

    The current financial condition of NOK is very strong as evidenced by the large number of positive fundamental factors. The stock represents a good value when compared to other stocks in its industry group and appears likely to experience further price appreciation. Operating cash flow remains positive. Looking forward, the analyst consensus forecast for revenue and earnings for the next two quarters is expected to show improvement versus the prior quarter. Price momentum is strong and the stock has outperformed the market when compared to the S&P 500. As long as the positive fundamental outlook does not change, this stock should be a strong performer over the intermediate term.

    The Price/Cash Flow ratio is 1.27. A low ratio shows a strong ability to generate cash and reflects well on a company’s stock price and liquidity. The average Price/Cash Flow ratio for this Industry Group (Comm. Equip.) is 24.88.

    Leading Price/Earnings (P/E) Ratio / Earnings Growth Rate) ratio is 0.52. This ratio is the Leading P/E ratio divided by expected per share earnings growth over the coming year. A PEG ratio greater than 1 indicates a stock may be overvalued or the market expects future Earnings Per Share (EPS) to be greater than the EPS consensus. The average PEG ratio for this Industry Group (Comm. Equip.) is 1.09.

    NOK's PRVit score is at the 84th percentile of all firms in its industry, which leads to a recommendation to BUY. NOK is more attractively priced in relation to its true value than well over half of the stocks in its industry. Nokia is nothing but BUY…BUY…Buy I am long but 10,000 today.

    Yes Go NOK Go!

  • Report this Comment On August 28, 2013, at 8:39 AM, jvgfool wrote:

    These kind of articles cheapen Motley Fool. MF preaches research, and these article have zilch research. This is just confusing spam to MF members. Please stop. If you don't have anything to write about. Then don't. My time is valuable too.

  • Report this Comment On August 28, 2013, at 10:19 AM, techy46 wrote:

    More anti-Microsoft and Nokia dribble. Go play with your Apple and Google toys.

  • Report this Comment On August 28, 2013, at 10:34 AM, VeryWiseInvestor wrote:

    Shows how much an BBA and MBA from the same FL school is worth. And he lives a block away because he can't afford to move out on his college roommates.

    He's generated more attention than he or Motley Fool deserves.

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