) has finally managed to get some big carrier partners to revive
its smartphone business. These carriers are believed to be
betting on Nokia, in order to reduce their dependence on
) iPhone and other Android-based phones.
) - the second largest carrier in the U.S. started selling
Nokia's latest Lumia offering, while the biggest U.S. carrier
Verizon Communications Inc.
) has started taking pre orders for its customized Lumia 822 from
November 13. Moreover, T-Mobile USA, one of the top 4 U.S.
carriers, is also likely to offer Lumia 810, before the holiday
In mainland China,
China Mobile Limited
) has revealed its customized Lumia 920T offering, which is the
first from the world's largest mobile operator. With a 3G
penetration of as low as 19%, China provides huge growth
opportunity for Nokia, which has been a strong ground for the
company over the years.
Nokia provides the carriers the opportunity to have their own
customized Lumia, thereby differentiating their products from the
competitors. This is a unique benefit, which will enable Nokia to
win more carrier partners particularly in the lucrative U.S.
market, where it has lagged over years. However, the lack of
applications as compared to Apple and Android has been the major
cause of concern for
Tying up with these big carriers couldn't have come at a
better time for the Finnish telecom giant as Nokia will leverage
from the marketing prowess of
), which will target its huge user base to popularize its
recently launched Windows/Windows Phone 8 Operating
Nokia is expected to benefit from the marketing push of the
big operators, which are looking to add on a third ecosystem to
increase the competition in the smartphone market. Higher
smartphone subsidies to tap customers are eating up on the
margins of these carriers. Thus, a third OS will not only reduce
the carriers' dependence on Android or iOS but will also provide
customers with wider choice given Lumia's variety.
Nokia reported dismal results for the third quarter of 2012,
with the company shipping only 6.3 million smart devices, which
include only 2.9 million Lumia series phones. We believe this big
carrier partnership could act as a boon for Nokia to stamp
Lumia's mark as one of the biggest smartphone brands in the
world. However, Nokia will require more such partnerships to
create a niche for itself as Windows phone has little customer
acceptance till date.
We maintain our long-term Neutral recommendation on Nokia.
Currently, the company retains a Zacks #3 Rank, implying a
short-term Hold rating.
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