Nokia Is Maintaining Its Focus

Jun.18.12 | About: Nokia Corporation (NOK)

Already in my February article Nokia's Windows Phone Lumia Will Conquer The World Bit By Bit I wrote that Nokia will be concentrating on their Windows Lumia phone in the years to come.

Nokia (NYSE:NOK) is in a transactional phase which could last for another two years. The news that Nokia will cut 10,000 jobs by the end of 2013 is just part of the plan. Nokia has now axed 40,000 jobs since September 2010.

If we believe Henry Blodget Nokia might go bankrupt. The company is indeed burning cash but the bleeding will be done when the Lumia is generally accepted around the world as a great alternative besides Apple's (NASDAQ:AAPL) iPhones and Samsung's Android phones.

Nokia cashClick to enlarge

Although Nokia said it plans "to significantly reduce its operating expenses," it will continue to focus on smartphones as well as cheaper feature phones and intends to expand location-based services.

Nokia is of course pinning its strategy on the Windows Lumia phones an in April the company announced one of its worst quarterly results ever, blaming tough competition for a €929 million net loss in the first quarter as sales plunged, especially in the smartphone market.

Microsoft needs its Windows strategy on smartphones and tablets to work quite desperately, and desperate requirements could result in desperate moves. So a Microsoft takeover is always a possibility.

But before we think of a takeover we all know Windows Phone is a great mobile OS and has a lot of potential; with Windows 8 just around the corner it makes sense for Nokia to position itself as Microsoft's premium mobile device manufacturer for phones as well as tablets.

Nokia's Windows Phone Lumia will conquer the world bit by bit, but investors need patience.

Disclosure: I am long NOK.