Nokia is back on track

After two years of cost cutting and product improvements Nokia has reported profit for the first time in 1.5 years. Strategy being flagship of Microsoft Windows Phone has started to pay off. Sales grew by 11%, 4.4 Lumias were sold last quarter and sale price was on average 33% higher, grossing more revenue.

Nokia and AT&T will attempt to defy iPhone’s paradigm

Carriers who sell iPhone have love/hate relationship with Apple. Revenue per user (ARPU) from iPhone customers is higher than other phones, but device subsidies and other costs are also higher. Apple dictatorial ‘my way or highway’ of doing business gets under their skin. Apple has gutted mobile value chain disproportionally shifting profits. While number of iPhones sold increases - carriers margins keep dropping.

AT&T, the iPhone beachhead, is trying to shake things up by partnering with Nokia on the launch of flagship Lumia 900. Nokia is desperate to retake US market after being irrelevant for the last 7 years and has excellent product to show at low price. Nokia has gotten its foot in the door already with more affordable Lumia 710 on T-Mobile network. The device, which has been free with contract has attracted a lot of new smart phone buyers and sold better than Samsung Galaxy S II.

Nokia and AT&T will throw extraordinary resources to ensure the success of Lumia 900. First, Nokia ensured their Lumia 900 was the most talked about product during the CES in Las Vegas. Now AT&T is going to follow the suit. Cnet quoted AT&T device head Jeff Bradley “At all levels, this is a notch above anything we've ever done" , noting that includes the launch of the iPhone.

Nokia Lumia phones off to a good start

This is one of the very few reports available on how Nokia Lumia phone sales are performing since after the launch in November 2011. Reports vary from 800,000 to 2 million phones sold from November to the New Year show strong demand.

Nokia hopes Lumia will illuminate and bring new light

Today Nokia unveiled two Windows phone devices first to be released in 6 Western Europian countries for holiday season, later to be released in Asia, Russia and N.America. Price of 280 EURO is excellent.
Analysts predict with Nokia ability to scale Windows Phone will take 10% of the European smart phone market next year. I am sure Nokia and Microsoft will be ecstatic if that happens. So far Windows Phone sales have been a disappointment for Microsoft. Predictions are just predictions and being able to scale worldwide is important IF THERE IS A DEMAND. In the end, consumer is who will make a choice between Windows Phone, iPhone and Android devices.
So far very few have chosen Windows Phone.

Justification of Meego and reveal of the first Nokia Windows Phone

Leaked video of the first Nokia with Windows Phone mango OS. In the beginning Elop explains why they are still not throwing out Meego
http://www.youtube.com/watch?v=8M1wC0pS_No

Who would buy Nokia?

That is crazy to think anybody would be looking to buy Nokia out. But stranger things have happened. Roadkill Palm was bought by HP and continues to be on the curb of the mobile highway, left in the dust. Who needs Nokia’s “burning platform”? Who needs Nokia brand? And if such a fool is out there, how much money do they need to put up? NOK market cap is at 23 billion. That means somebody will need to have about $30B of cash or stock for takeover.

The most valuable in Nokia’s business today is their ability to distribute and sell phones in huge volumes (1m phone sold per day) worldwide (maybe not in the USA). That is exactly why Microsoft and Google were fighting to strike the partnership with the handset manufacturer. Also, a PC or chip company would be looking to differentiate itself from competition and establish footprint in the mobile market.

Elop, Nokia CEO denies the takeover rumors but how much power does he really have? He was elected to the board a month ago, May 3^rd and he is not chairman of the board. If there will be offer on the table more favorable than deal with Microsoft shareholders will demand to agree to the takeover. Corporate governance laws in Europe favors shareholders and Cadbury acquisition was the best recent example. The following candidates are the potential buyers in my point of view:

Intel – desperately want to get into emerging mobile chip space. Meego platform was their gateway there, which is now closing. In May in San Francisco of all places Nokia and Intel jointly held MEEGO conference. I see Intel desperate desire to hold on to Meego.

Google – company made head scratching decisions before. They lost out to Microsoft in the attempt to strike partnership deal with Nokia. They can try now to buy Nokia out?

Microsoft – you’d think the company learnt from Danger disaster not to buy Nokia, but again, stranger things have happened. The only thing Microsoft needed from Nokia was they distribution and they got it with the partnership agreement.

Chinese – these guys are hungry for western brands and IP, distribution. In addition, Nokia core competency of cheap feature phones based on S40 platform has large share in China and Africa (also Chinese domain).

Dell – HP bought dead Palm. Dell may buy dead Nokia. Necromaniac drive of those computer manufacturers is inexplicable but undeniable

Can direct competitor takeover likely? Not really. Ericsson and Motorola are not in the position to gobble up Nokia