Nokia's (NYSE:NOK) fall from its place of dominance in the mobile phone space has been well documented, both here and elsewhere. Once the leading name in the cellular phone market, the company finds itself today struggling to come to grips with a world where mobile computing represents the new norm and smartphones dominate the competitive landscape.

However, after it seemed like the market had given it up for dead, Nokia's shares have shown renewed signs of life over the last several weeks, rising an astounding 25% last week alone, fueled in no short measure by the supposed success of its recently launched Lumia 920 smartphone. Thanks to its partnership with Microsoft (NASDAQ:MSFT), whose Windows Phone software powers the device, it now seems that Nokia might finally have won itself a seat at the table in the burgeoning smartphone market.

And although this seems encouraging, the competition has never been fiercer in the smartphone space. Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) still sit comfortably atop the smartphone market with their dominant iOS and Android operating systems, respectively. However, a win from Nokia could help usher in the Windows Phone as a viable third option.

All this amounts to Nokia's shares looking tantalizing from one angle, with its seeming recent successes, but also fraught with uncertainty and risk. In order to help investors crystallize their thinking on the beleaguered smartphone giant, the Fool recently published a special research note on Nokia, which covers all of the essential information investors need to understand when looking at the Finnish smartphone maker. To introduce our readers to the product, we included a free excerpt from the report. If you find this compelling, you can just click here to access the report in its entirety. Enjoy.

The opportunity
In fast-moving consumer technology markets, companies need to innovate with cutting-edge new features and invest in brands that establish customer loyalty. The name of the game is adapt or die. Nokia was on the verge of doing the latter, but instead it has spent the two years since CEO Stephen Elop's arrival from Microsoft becoming leaner and meaner.

Nokia is speeding up its phone development cycle to become competitive with industry leaders Apple, Google, HTC, and Samsung. It has moved its manufacturing facilities into Asia to lower production costs, enabling higher profit margins. Nokia also crafted its Lumia brand to represent its new portfolio of Windows phones, the most recent of which launched this month running the Windows Phone 8 operating system.

U.S.-based investors need to understand that Nokia is a global company that is building high-end smartphones for wealthy economies, but also low-end feature phones for developing parts of the world. In terms of unit sales, Nokia sold 6 million smart devices in Q3 2012 compared to over 76 million mobile phones. Its Asha lineup of mobile phones is actually doing quite well in large markets like India. In these markets, Nokia still has a strong consumer brand and is able to create innovative low-cost phones with an average selling price around 30 euros.

One underappreciated part of Nokia's business is its Location and Commerce segment, which includes NAVTEQ, a maker of maps for GPS and other purposes. Consider that four out of five cars with built-in GPS systems use NAVTEQ data. Nokia is the maps provider for all Windows phones, not just the ones it builds. Companies like Amazon and Oracle also use Navteq data for its geolocation capabilities.

Nokia's mapping data, and its ability to create valuable apps from it, are distinguishing features that other Windows Phones won't have. Its City Lens app is an augmented reality experience that allows users to hold up their Lumia phones to view neighboring shops and restaurants and then learn more about them. This is a unique offering that can set Nokia apart from a crowded pack.


This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.