Microsoft's Most Important Lumia Might Not Even Make It to the U.S.

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Soon, Nokia's (NYSE: NOK  ) hardware business will officially become part of Microsoft (NASDAQ: MSFT  ) , giving the Windows-maker a variety of handsets. When judging Microsoft's phones, investors might be drawn to the flagship Lumia 1020, or the budget 521. More important than either is the upcoming Lumia 1320 -- its low-cost phablet.

Phablets (oversized smartphones popularized by Google's (NASDAQ: GOOGL  ) hardware partners) have become immensely popular in emerging markets, particularly in Asia. As Microsoft prepares to focus on these markets, the Lumia 1320 will be crucial.

Can Windows Phone survive?
There's a lot of reason to doubt Microsoft's Windows Phone. Although its market share has been increasing, it remains in a distant third place behind both Google's Android and Apple's iOS, and I wouldn't expect that to change for the foreseeable future: Microsoft's mobile platform has been slowly adding major apps, but it still lacks Apple's robust ecosystem; Nokia may give its users more choice than Apple when it comes to hardware, but it still doesn't compare to the hundreds of different handsets powered by Google's Android.

Nevertheless, if Microsoft's mobile platform is going to emerge as a major player, it's going to come down to countries such as Indonesia, India, and China. After announcing the deal to acquire Nokia, Microsoft's management said it will spend the next year targeting emerging markets.

Right now, Google's Android dominates these countries, but that could change. As the developers of Firefox OS are quick to point out, newer versions of Google's operating system aren't optimized for low-cost hardware; older versions of Android are still being shipped on brand-new handsets. The market is Google's to lose.

Phablets are the key to emerging markets
If Microsoft is going to build a bigger presence in these markets, it's going to be with Lumia's new phablet. Although these oversized phones may remain a novelty in the U.S., they've taken emerging markets by storm.

Last month, IDC reported that, in Asia (excluding Japan), phablets are now more popular than both tablets and portable PCs combined. This is hardly surprising -- if you can only afford to spend a few hundred dollars on technology, the phablet is the most economical choice. Originally, Samsung dominated this market, but other low-cost manufacturers have moved in, offering cheaper alternatives powered by Google's Android.

Soon, buyers in these markets will have the opportunity to purchase a phablet running Windows Phone. Microsoft and Nokia plan to launch the Lumia 1320 in China and Vietnam early next year, followed followed by India, the rest of Asia, and Europe. With a 6-inch screen and $340 price tag, it could be highly attractive to buyers in emerging markets.

Keep an eye on the Lumia 1320
Despite remaining far behind both Apple and Google in terms of market share, Microsoft isn't giving up on Windows Phone -- by acquiring Nokia, it's doubling down, and looking to emerging markets for growth.

For now, Google's Android dominates these markets, but if Microsoft offers higher-quality Windows Phones, it may be able to take some share. Given the exploding popularity of phablets, the Lumia 1320 is the single most important handset in Microsoft's arsenal.

Two words Microsoft's chairman doesn't want you to hear
Interested in the next tech revolution? Then you'll need to learn about the radical technology shift some say forced the mighty Bill Gates into a premature retirement. Meanwhile, early in-the-know investors are already getting filthy rich off it, by quietly investing in the three companies that control its fortune-making future. You've probably heard of one of them, but you're probably never heard of the other two. To find out what they are, click here to watch this shocking video presentation!

Read/Post Comments (2) | Recommend This Article (0)

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 October 26, 2013, at 10:09 AM, lee654 wrote:

    Awesome will buy 4 !

  • Report this Comment On October 26, 2013, at 11:30 AM, techy46 wrote:

    Winokia will keep selling a wide spectrum of mobile devices ranging from the Asha 101 up to the Lumia 1520 probably cracking 10m smart phones in fiscal Q4 2013. The key to MS success isn't going to be any one device but the sysnergy created by all devices from Asha to Xbox available from multiple vendors. Acer W4, Asus T100, Dell Venue 8 and Lenovo Miix 2 are some pretty nice 8" tablets and 2-in-1's.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2700912, ~/Articles/ArticleHandler.aspx, 9/30/2016 9:44:53 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 28 minutes ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:00 PM
GOOGL $804.06 Up +1.42 +0.18%
Alphabet (A shares… CAPS Rating: *****
MSFT $57.60 Up +0.20 +0.35%
Microsoft CAPS Rating: ****
NOK $5.79 Up +0.07 +1.22%
Nokia CAPS Rating: **