The past week saw quite a few developments in the mobile sector.
) stock beat its previous all-time high of $642/share in trading
this week, and even managed to retain most of its
gains, as rumors about an imminent iPhone 5 launch fueled
investors' optimism. With Nokia (
) having announced a media event for September 5th, rumors about
the launch of Windows 8 Lumia phones and the possible addition of
) to Nokia's carrier list gained ground, lifting the stock over 15%
over last week. Meanwhile, Research in Motion's (
) stock fell 15% for the week as the company's attempts to assuage
concerns that the next version of its BlackBerry Enterprise
Server (BES) will not support existing BlackBerry devices failed to
have the desired effect.
See our complete analysis of Apple
| Nokia |
Apple scales new highs
Investors continued to lap up the Apple phenomenon this
week as rumors about an impending iPhone 5 launch gained ground.
Despite having reported muted Q3 FY2012 results that fell
short of market expectations just four weeks back, the stock
has seen tremendous buying interest, rallying more than 16%
and surpassing its previous high of $642. Apple is now the most
valuable publicly traded company in U.S. history, having
surpassed Microsoft's (
) previously held record of $616 billion with a current market
cap of over $620 billion. As the stock inches closer
to our fair price estimate of $700, we evaluated the various
drivers that could take Apple even higher and become the
world's first trillion dollar company. (Read What Will Take
Apple Past The $1,000 Mark? for more insights)
Nokia's Lumia line could have a much bigger presence in the
U.S. soon. Not only are Nokia and Microsoft planning a media event
on September 5 to announce a possible Windows 8 Lumia launch, but
they are also are rumored to have roped in the nation's largest
wireless carrier, Verizon, to carry the new smartphone.
Verizon will not be part of the media event however, a Bloomberg
source said. (see Nokia's Windows 8 Phones Likely To Arrive On
Verizon) This news comes on the heels of Richard Kerris, Nokia's
Vice President of Worldwide Developer Relations, revealing in an
last month that a Lumia device could soon be on its way to
Verizon. With AT&T (T) and T-Mobile already offering the
Lumia 900 and Lumia 710, respectively, adding Verizon could help
Nokia's addressable market in the U.S. surge by more than 80%.
However, Nokia faces an uphill battle against the two
well-entrenched ecosystems of Apple and Google
(GOOG) to create a niche for itself and Microsoft.
Nonetheless, more carrier partnerships and better app support to
drive Lumia sales will be key to its turnaround hopes.
RIM's BES troubles
Several conflicting reports have emerged in the last couple of
days regarding RIM's upcoming BlackBerry Enterprise Server 10.
With RIM preparing to launch the enterprise server simultaneously
with new QNX-based BB10 devices in Q1 2013, concerns were raised
about the compatibility of the BES 10 with older BlackBerry
devices. RIM sought to clarify the concerns with a statement on
Wednesday that the company would provide an upgrade to the BES that
will not only be compatible with its current line of smartphones
and tablets, but also support iOS and Android
devices. However, the transition path may not be very smooth
according to BGR, which claims that the enterprises will need to
run the older BES 5 alongside BES 10 to support the older devices.
(see With Turnaround At Stake, RIM Needs To Support Older
BlackBerries With BES 10)
While RIM hasn't issued a public clarification yet, if BGR's
claims are true, it could make new installations costly and less
desirable for enterprises. This could not only result in fewer
installations of the new servers but also cause faster migration
away from the BlackBerry platform. With RIM still largely dependent
on enterprises for its Push Email division, which
constitutes 44% of our $12 price estimate for RIM, this could
be a big blow to its turnaround plans.
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