It's been a nice ride for long-suffering Nokia (NYSE:NOK) shareholders. With its stock price up nearly 40% the past month alone, investors are beginning to take notice of what Nokia has to offer. For a lot of us, the good tidings heading Nokia's way are long overdue. But then, not everyone was (or is) on board with CEO Stephen Elop's vision – to transform Nokia into a significant force in the smartphone industry.

The announcement that Nokia was partnering with Microsoft (NASDAQ:MSFT) to run its new mobile operating system in a new line of smartphones seems like ancient history now. Of course, it's only been a year since Elop began implementing Nokia's strategic shift and, as the last couple of months have shown, the new direction is starting to pay dividends -- literally, and figuratively.

Playing with the big boys
Though Apple (NASDAQ:AAPL) fans will never admit it, the iPhone is under siege, and not just from Nokia. Apple's best new friend, Google (NASDAQ:GOOGL), is happy to combine forces to supply Apple smartphone users with its maps app, and jointly bid $500 million for Kodak's extensive patent portfolio. That's just good business. But, even as the two industry behemoths walk arm in arm, Google is not so quietly selling a million Nexus 4 smartphone units a month, the result of its partnership with LG.

And let's not forget the world leader in smartphone sales, Samsung. With over 55 million smartphone units sold in Q3 of this year, Samsung trounced Apple's paltry 23 .6 million. Of course, that was pre-iPhone 5, so those figures are sure to change in Q4, but you get the idea -- competition is heating up. Don't forget to include Research In Motion (NYSE:BB), which, like Nokia, saw phone sales dip last quarter, too. But, as RIM shareholders will tell you, just wait until the new and improved BB10 phones and OS are unveiled Jan . 30. RIM investors aren't waiting until next month though, evidenced by its 60% jump in stock price the past month.

Yeah, but what about Nokia? As expected, Nokia's smartphone sales dipped in Q3, according to Gartner Research. Like Apple fans biding their time for the release of iPhone 5, Nokia customers were not-so-patiently waiting for its Windows 8 Lumia lineup in Q3. The wait's over and, if the sales results at both and telecom partner AT&T are any indication, Lumia's doing just fine, thank you very much.

Often lost in the mobile phone discussions, because so much emphasis is put on do-it-all smartphones, is the fact that Nokia dominates in several international markets, generating significant sales of its entry-level touch phones, like the Asha line, and the new Lumia 620. Nokia's 82.3 million phones sold in Q3 was second only to Samsung's 98 million – and that ain't bad. Plus, the recent deal with China Mobile (NYSE:CHL) to supply its 700 million customers with Nokia's first TD-SCDMA compliant Windows Phone in the country won't hurt.

Okay, but Nokia, an income investment?
Nokia naysayers are quick to point out that its dividend, which currently stands at a whopping 6.6% yield, is at risk, and has been for some time. The problem, they say, is that Nokia's bleeding cash in every quarter as it ramps up Lumia smartphone sales, putting its industry-leading dividend yield on the chopping block. Nothing could be further from the truth. Nokia's Q3 ready cash is down from the prior quarter, true; but with over $12 billion still in reserve, the death of Nokia's dividend has been greatly exaggerated.

On the growth side of the Nokia opportunity, there's still its 10,000 patents, estimated to be worth a cool $6 billion, and currently generating $650 million a year in revenue. And Nokia's patent revenue is likely to go up, thanks to the recent lawsuit claiming that RIM infringed on its WLAN (WiFi) technologies. Add in a profitable Siemens division (now a bit leaner after the sale of the fiber optics unit), world class mobile maps, and the fact that the company is netting $222 million with the recent sale/leaseback of its Finland headquarters, and Elop is quickly transforming Nokia into a lean, smartphone-making machine.

As many a Fool has commented in prior articles, the sum of Nokia's parts is greater than the whole -- the whole, in this instance, being its current share price. Now, throw in a 6.6% dividend yield on top of what remains an outstanding growth opportunity. That's the recipe for one of the best growth and income additions you can make to your portfolio -- and heading into 2013, that's exactly what Nokia is.

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.