Nokia Corporation (NOK), the world’s largest mobile phone maker, recently announced the availability of its N9 smartphone across all its stores. The new handset was designed earlier in June, this year.
The new device will run on Linux-based MeeGo software, which is an open source mobile operating system and is jointly developed by Nokia and Intel Corporation (INTL). The newly launched unsubsidized mobile device is available in three attractive colors and the 16 GB handset is priced at $650 while the 64GB handset will come at $750.
Earlier, Nokia took a historic decision to adopt Microsoft Corporation’s (MSFT) Windows Phone 7 software for all its forthcoming smartphones, thereby sidelining its own less user-friendly operating system Symbian and the much-hyped Linux-based MeeGo software. But the company surprised everyone by reverting back to the MeeGo operating system.
The latest offering of the company is expected to be the last handset powered by MeeGo software. Going forward, Nokia will shift to the much-hyped Windows Phone 7 based platforms for manufacturing its upcoming smartphones.
Earlier in April, Nokia launched two Symbian-based smartphones, namely E6 and X7. Going forward, after the launch of Windows 7-based smartphones, it will be interesting to see how the company handles two completely different operating systems.
Currently, Nokia is playing the waiting game till they launch their new smartphones based on Windows Phone7 platforms. Till then Nokia’s low-end dual-sim handsets, which are gaining huge popularity in the emerging markets of Asia and Latin America, will help sustain its market share.
Nokia faces stiff competition from Google Inc’s (GOOG) Android-based smartphones and Apple Inc’s (AAPL) iPhones. So, we believe that the newly launched smartphone N9 with 16GB to 64GB capacity will offer some resistance against such cut-throat competition.
Further, we expect Nokia to gradually lose market share since we do not find any product in Nokia’s existing portfolio, which is unique in the market.
However, we believe that the recent lawsuit settlement with Apple coupled with Windows Phone 7 based smartphones launch and low-end product launch with dual-sim facility will act as strong catalyst for the stock going forward.
We, thus, maintain our long-term Neutral recommendation for Nokia. Currently, Nokia has a Zacks #3 Rank, implying a short-term Hold rating on the stock.
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