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Nokia's (NOK) Stephen Elop took time at a pre N9-release event to position the device as a "proof of concept" launch showing the company's willingness to change and offer new products while continuing to execute around its industrial design expertise:

Now one of the big questions we get is, "Yes, so you're launching this device but we know you're transitioning to Windows Phone, what's the point? What is the point?" Well, the point is this: there is a whole collection of innovation that is available in the N9 that is going to live on.

If it sounds as if Mr. Elop is about to plug upcoming devices, you're right: Nokia's CEO, after asking the crowd to turn off recording devices, briefly showcased a phone nearly identical in shape, design and presumably, specifications, running Windows 7 Mango. It seems not all in the crowd heeded the request to cease and desist, and the video is now available online (Technet.hu, a Hungarian technology website).

The phone, code-named "Sea Ray," is the first of a slew of Windows Phone products Nokia's working to unleash before the end of the year.

Although brief glimpses of these upcoming handhelds have been caught before, including internal model names (W7-00, featuring a QWERTY keyboard, and W8-00, which Mr. Elop seemed to be showing off), a working Windows Phone prototype is a game changer for Nokia's future in ways which the N9 isn't.

The first point to make is that unlike the similarly-struggling Research In Motion (RIMM), Nokia's timeline for a major product refresh looks firm. Part of the reason Research In Motion has turned into one of the most hated equities currently traded has to do with repeated launch delays and a tentative 2012 target date for its new mobile operating system, QNX. Mr. Elop's presentation, pleas for confidentiality notwithstanding, seems to be geared towards dispelling worries about Nokia's ability to execute on stated goals:

At the end of the day, the answer to our stock price or how you feel or any of those things will be directly related to results. In the short term, results are very much about removing ambiguity and moving forward.

The second point to make is that from a company culture standpoint, Mr. Elop's now famous "burning platform" memo appears to have been the tip of a long spear, and Nokia's former success-by-virtue-of-inertia mentality is gone. This bodes well given how fluid the smartphone market is and continues to be.

From a trading standpoint, I reiterate my view that current price action indicates it's not a good time to establish or broaden exposure to NOK. Standard & Poor's downgraded the equity from 4 to 3 stars on 06.23, adding more selling pressure after a dismal 6-month 42% dip.

Longer-term, however, this recent development showed Nokia to be a moving target, and pivoting toward Windows Phone at a good pace. While it's entirely too early to call its partnership with Microsoft a success, it's safe to say both the Finnish company and the Redmond giant both look better in light of their collaboration than they would have without it.

Source: Nokia's Windows Phone Efforts Bode Well for Both Companies