Why Nokia's Newest Lumia Phones Will Make Windows Phone 8 Successful

| About: Nokia Corporation (NOK)

In case you missed it, this past week at the MWC in Barcelona, Nokia (NYSE:NOK) released two new Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone 8 operating system. The phones, Lumia 520 and Lumia 720, complete Nokia's wide range of smartphones, enabling customers the chance to own a Windows Phone 8 at all price points. As a result, both Nokia and Microsoft's Windows Phone 8 platform stand to make drastic market share gains in 2013.

The first phone, the Lumia 520, is Nokia's new low-cost smartphone designed at first time users and emerging markets. The Lumia 520, with its 1 ghz Snapdragon processor, 4-inch screen and 5 megapixel camera, features rather impressive specs, especially given the $183 (€139) price tag. The Lumia 520 will go on sale during the first quarter of 2013 in Hong Kong and Vietnam, and then in U.S., Europe, China, India, Latin America and Africa during the second quarter.

Nokia's second new phone, the Lumia 720, is positioned as more of a mid-range phone that has borrowed some features from the Lumia 920, Nokia's flagship phone. The phone has a 1 ghz Snapdragon processor, a 4.3-inch LCD display with Nokia's ClearBlack feature that reduces outdoor glare, a 6.7 megapixel rear-facing camera, a 1.3 megapixel front-facing camera capable of Skype calls, and the phone is capable of wireless charging. The Lumia 720 goes on sale this quarter in Singapore, Hong Kong, and Vietnam, and then will be for sale in China, Europe, Asia, Africa, and India in the second quarter.

According to Gartner, Microsoft's Windows Phone 8 global market share reached 3% in Q4 2012, representing a 124% increase y/y. And now, with the addition of the Lumia 520 and Lumia 720 to Nokia's smartphone lineup, customers now have five Lumia options, not including variants, to choose from (620, 820, 920).

People, especially in the U.S., often write off Windows Phone 8 as a failed operating system given the abundance of Android and iPhone users they encounter every day. What they fail to recognize is the potential of Windows Phone 8 in emerging markets such as Africa, Asia, and India. While Nokia's competitors, BlackBerry (NASDAQ:BBRY) and Apple (NASDAQ:AAPL), currently lack low-end models of their current operating systems for sale in many emerging markets, Nokia's Lumia lineup is positioned to accommodate all price-ranges in these regions.

Due to the new additions to Nokia's Lumia family, Nokia is one of the best positioned companies to benefit from the increased mobile penetration in emerging markets. And, with the success of Nokia, will come the success of Windows Phone 8. Despite what happens in the U.S. with Windows Phone 8, look for Nokia's and Windows Phone 8's global market share to increase substantially in 2013.

Disclosure: I am long MSFT. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.