AT&T Could be First Carrier with Nokia Smartphones Next Year
An AT&T (NYSE:T) official said today that the company is in talks with Nokia (NYSE:NOK) to start selling the new Lumia and Asha range of smartphones when Nokia re-enters U.S market next year. [1] Nokia had launched the new phones, based on Microsoft’s (NASDAQ:MSFT) Windows Mango platform, at a big event in London last month and announced that they will be available in the U.S. starting early next year. The struggling mobile phone maker’s planned comeback will no doubt receive a shot in the arm if talks with the second largest wireless carrier in the U.S. succeed. AT&T was also the first carrier to sell Apple’s (NASDAQ:AAPL) iPhone in the U.S.
Our $7 price estimate for Nokia stock is now about 5% below market price.
See our complete analysis for Nokia stock here
Nokia’s U.S. Plans will be boosted
Nokia is shipping its smartphones to Europe and emerging markets first, before entering the U.S. We discussed how we believe this is because of its better brand image and significant experience selling mobile phones in the emerging markets which contributes about 36% of its stock value.
In the U.S., the company plans to use its entry-level smartphones to woo first-time smartphone users who are dazed by the overwhelming amount of technology a complex smartphone can throw at a new user. (see Nokia Lays Out Plans to Woo ‘Smartphone Virgins’)
One of the main reasons (apart from relying on a old Symbian OS) why Nokia was unable to compete in the U.S. market in its earlier stint was a lack of relationship with any of the carriers. On the other hand, Apple brought AT&T on-board for selling its iPhone. Nokia has lost more than 60 billion euros ($85 billion) in market value since Apple introduced the iPhone in 2007 and been forced out of the U.S. market as well. It looks like the company has learned from its past mistakes and this deal will be a step in the right direction as the company looks to stem the loss in its market share in the developed markets.
Also, the fact that Nokia’s new smartphones use Microsoft’s Windows Mango platform and an improved version of Symbian OS bodes well for its future.
Lumia phones have some attractive features
Both of Nokia’s Lumia Windows Phones, the 710 and the 800, feature Nokia Drive, a full-fledged personal navigation service with free turn-by-turn navigation and dedicated in-car user interface. They also sport Nokia Music introducing MixRadio, a free global music streaming application with hundreds of channels. [2]
The phones will help attract a lot of Microsoft’s followers who are familiar with the company’s operating systems and will love to have a smartphone from their favorite brand. In addition, users will feel pampered by the huge free storage space of 25GB they will be able to access with Windows Live Sky Drive.
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Notes:- AT&T Says It Is in Talks to Carry Nokia Phones With Microsoft Software, Bloomberg, November 17th, 2011 [↩]
- Nokia launches first Windows Phones to take on Apple’s iPhone 4S, AppleInsider, October 26th, 2011 [↩]