Has Nokia Developed an iPhone Contender?

Has Nokia (NOK) finally come up with a smart phone that can take on the Apple (AAPL) iPhone?

Thursday morning, the company launched a new model called the N900 which is based on the company’s Linux-based Maemo 5 operating system. Not everyone is going to be convinced, but Davenport & Co. analyst F. Drake Johnstone is. Late Thursday afternoon, he raised his rating on Nokia to Buy from Hold, setting a price target of $18.

He says the N900 gives the company “good potential to complete effectively in the smart phone market against Apple, Research in Motion (RIMM) and new handsets powered by Google’s (GOOG) Android operating system.” Certainly, it has impressive specs: touch screen, slide-out keyboard, 5 MP camera, GPS, Mozilla browser, up to 48 GB of storage. The N900 can run up to 12 applications at once; it runs Adobe (ADBE) Flash, which the iPhone doesn’t. Johnstone concedes that Apple has the edge in the near-term, in particular given 65,000 choices in the App Store. But he thinks that over the 12-18 months, “Nokia could generate significant consumer and corporate demand” for Maemo-based phones, “which should motivate software developers to create new software applications for these devices.”

Johnstone sees 2010 GAAP EPS of $1.22 a share, above the Street at $1.06, based on his view that “greater demand for Nokia’s new high-end smart phones should help to stabilize the average sellsing price of Nokia’s handsets.”

In Thursday’s trading, NOK rose 50 cents, or 3.8%, to $13.63.

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Comments

[Paul Harper:]

My thoughts on NOK are fairly bullish. This week has been pretty momentous when you look at it.

3G booklet : look for them to sign deals with a large carrier (VOD par example)

Mobile payment solution ..... need I say more

The N900, which if it does what it says on the tin, will become the de facto standard for any reporter, especially if the camera is as good (or better) than the N82

I bought NOK yesterday

Aug 28 02:36 AM

[Uncle Miltie:]

While I love my iPhone, I also would love to see a real competitor emerge to force Apple to keep innovating. Past Nokia phones have offered great specs, but suffered greatly from a nearly impossible to navigate menu system. If Nokia has finally redesigned their OS and made it easier to actually use all the functions they have, they could emerge as a viable option to the iPhone. I'll hold off judgment until I see evidence of what their OS actually accomplishes.

Aug 28 08:18 AM

[Diegojames:]

I own Nokia stock and a E71 handset; it is great to use and is unlocked variety-cheap on a per month basis. Great for business travel using a laptop for E mail. With this new development it is timeto buy more Nokia stock. I Phone touch keys are difficult and everyone owns one and monthly costs are high.
E71 fits easily in a front pocket with a wallet and is a great camera.The new deal with Linux and something with Microsoft and this is a REAL competitor.

Aug 30 10:23 PM