Change is in the air for Nokia
Let's dig into the details of Nokia's struggled turnaround to find out whether the Finnish cell-phone maker is the ultimate value play.
The power of two
A strategic partnership with Microsoft
There's a lot riding on the deal for Microsoft as well. The software giant hopes the teamwork will help it build up a global mobile ecosystem to better compete with Google's
The network effect
Because Nokia and Microsoft are playing catch-up to their rivals, their media ecosystem is still largely underdeveloped. For example, the Windows mobile platform offers only around 70,000 apps, whereas the iPhone features nearly 600,000 and Android more than 450,000. For more proof that Nokia's new device will have trouble measuring up, consider its other content shortcomings, such as no access to downloadable media like movies or TV shows, and limited magazine and news applications.
To be fair, Nokia's new phone does come with alternative perks like Microsoft's Xbox Live, Microsoft Office, and Bing. This may be enough to convince Microsoft fans to buy a Lumia 900, but I doubt it's enough to pull current iPhone and Android users away from their devices. In a letter from Stephen Elop last year, the Nokia CEO said, "The battle is moving from one of mobile devices to one of mobile ecosystems, and our strengths here are complimentary." He went on to say: "There are other mobile ecosystems. We will disrupt them." Those are bold words that unfortunately are largely unmerited, at least for now.
Easier said than done
Even if Nokia's new phone enjoys strong demand when it goes on sale, I'm not sure it will be enough to fuel a comeback. Research In Motion
At least its union with Microsoft gives Nokia a budding ecosystem -- that's more than can be said for RIM. However, Nokia has miles to go before it can claim significant market share from Apple and Google. Since the iPhone launched in 2007, Nokia has lost more than 80% of its market value, according to Bloomberg. With everything riding on the success of its new Windows phone, shares of Nokia could take a turn for the worst if sales of the device disappoint.
Not all is lost
For a full read on the situation, we'll have to wait until the Lumia 900 goes on sale this weekend. I love a good comeback story, but with rivals like Apple selling upwards of 4 million units in a single weekend, I'm worried the bar is set too high for Nokia to compete. But while Nokia still has to prove itself to investors, it's not too late to discover the stocks that are cashing in on the mobile industry today. Get instant access to The Motley Fool's free report, "3 Hidden Winners of the iPhone, iPad, and Android Revolution". The report won't be around forever so make sure to get yours today -- it's free.
Fool contributor Tamara Rutter owns shares of Apple. Follow her on Twitter, where she uses the handle @TamaraRutter, for more Foolish insight and investing ideas. The Motley Fool owns shares of Microsoft, Apple, and Google. Motley Fool newsletter services have recommended buying shares of Apple, Google, Nokia, and Microsoft and creating bull call spread positions in Apple and Microsoft. The Motley Fool has a disclosure policy. 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.