Nokia (NOK) Makes a Final Push with its Windows 8 Lumia Series

Shares of besieged handset manufacturer Nokia (NOK: Charts, News) have bounced back 46% over the past three months, but investors are hardly celebrating the rally, which has done little to atone for its 54% slide over the past twelve months and its 93% plunge over the past five years.

While some short term traders have profited from Nokia's rally, analysts and investors are increasingly concerned that the relief bounce is quickly coming to an end. Nokia's struggle has been well-documented, steeply falling from grace in 2007-2008 after failing to respond to the new threat of Apple's (AAPL: Charts, News) iPhone and the subsequent deluge of Google (GOOG: Charts, News) Android smartphones that flooded the marketplace. The market that Nokia once ruled, along with fellow fallen icon Research in Motion (RIMM: Charts, News), has been redefined by Apple and Samsung, and the new status quo seems unlikely to change anytime soon. Daily Chart
Technical analysts point to the descending triangle pattern in Nokia's chart, which suggests a strong downtrend that will cause the stock to break down if it closes below support at $2.40. Meanwhile, fundamental analysts believe that Nokia's lack of profitability for this year, which has canceled out traditional metrics such as P/E ratios, is a dangerous red flag that suggests that the stock is unsupported by a financial backbone. Lastly, investors are increasingly doubtful that Nokia's new Windows 8 Lumia phones will dent the market share of those two formidable opponents, Apple and Google, which have split the smartphone and tablet market in half over the past five years. Nokia's previous Windows Phone effort, the Windows Mobile 7 Lumia series, fell flat and failed to capture an audience, despite Microsoft's (MSFT: Charts, News) best efforts to build a large application market overnight through aggressive acquisitions. However, some investors are still putting faith in Nokia, believing that the cross-platform capabilities of Windows 8, which will operate on smartphones, tablets and personal computers, will offer new levels of cloud-based integration that will surpass the abilities of iOS or Android. Nokia's investors are putting so much faith in the new Lumia phones that an initial announcement that the new Lumia 820 and 920 phones would be exclusive to AT&T (T: Charts, News) caused a slight panic, due to AT&T's inferior LTE coverage. AT&T's LTE services covers only 65 major markets in comparison to rival Verizon's (VZ: Charts, News) 371. A second announcement from Nokia, which indicated that T-Mobile and Verizon will carry other variants of the Lumia, calmed investors. Although AT&T would exclusively offer Nokia's flagship 920 and 820 models, Verizon would carry a variant Lumia 822, codenamed Atlas. Meanwhile, T-Mobile announced that it would offer another variant, the Lumia 810, a slightly lighter version of the 820 with three additional hours of battery life. All of the new Lumia phones will run on Windows 8. By adding Verizon and T-Mobile to its carrier list, Nokia's phones will be offered at 13,892 locations across the United States - a massive step up from the 2,200 AT&T stores nationwide. This would allow Nokia to reach 75% of the cell phone market in the United States. The new Lumia phones are scheduled to hit the market shortly after Microsoft's upcoming release of Windows 8 on October 29. Analysts believe that this may represent Nokia's final effort to stay afloat and claw back towards a positive cash flow. The 2012 holiday season represents a fertile opportunity for Nokia to generate strong sales, but it has to first overcome Apple's iPhone 5 and Samsung's Galaxy series - both extremely tough and popular competitors. Other News About NOK Nokia WP8 Comes To Verizon and T-Mobile Will Windows 8 bring Nokia back from the brink? Is Nokia Making a Big Mistake? Did Nokia make the right call offering exclusivity to AT&T? Other Stocks in the News U.S. Sues WellsFargo; Shares Down 1.8% Wells Fargo gets hit hard by the U.S. government. American Express Goes Down Market with Wal-Mart American Express shareholders aren't pleased with its new deal with Wal-Mart. Copyright 2012 by, Inc. InvestorGuide has no control over the sites we link to, is not affiliated with these sites, and cannot take responsibility for their quality or suitability. The news, analysis, commentary and profile information is not meant to be comprehensive, and the data provided is not guaranteed to be accurate. WebFinance Inc., the publisher of this newsletter, is not a registered investment advisor or a broker/dealer. This is not a stock recommendation newsletter but rather a source for investment ideas, and we encourage you to fully research any company before considering investing. The opinions expressed herein are those of the author and do not necessarily represent the views of nor are they endorsed by WebFinance Inc. No employee of WebFinance has owned or currently owns any shares in the company described above. The above is neither an offer nor solicitation to buy or sell any securities. The trading of securities may not be suitable for all potential readers of this newsletter, and the purchase of stocks mentioned in this newsletter may result in the loss of some or all of any investment made. We recommend that you consult a stockbroker or financial advisor before buying or selling securities or making investment decisions. We are not responsible for claims made by advertisers and sponsors. Anyone who makes decisions based on what they read here does so at their own risk and cannot hold WebFinance Inc. (DBA, Inc.) or its employees responsible.

Published on Oct 11, 2012
By Leo Sun
Leo Sun
Leo Sun is a freelance finance writer and position trader. He focuses on a combination of value and momentum investing, with a strong interest in the trading philosophies of Warren Buffett and Peter Lynch. Leo also has experience writing articles to help small business owners acquire loans and manage their finances. He regularly contributes to the Stock of the Day analysis.

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