When Nokia (NYSE:NOK) moved its focus of operating system from Symbian to Windows (NASDAQ:MSFT), I liked the idea of it, among many other Nokia investors. There were many people who thought that Nokia should have picked Android (NASDAQ:GOOG) instead of Windows as its operating system, however Android was too crowded with too much competition, and Windows was a system where Nokia could set itself apart from the competition like Samsung, LG and HTC.
This might come to a change soon, however. Samsung, Huawei and HTC announced that they would start designing Windows 8 phones within the next couple quarters. This is good news for these companies as they will diversify their phone offerings, however this may hurt Nokia badly as the company wanted to be "the Windows Phone Company." Because of its unique position, Nokia has been able to get support and backing of Microsoft, as Microsoft wanted to gain significant market share in the mobile market through Nokia. Now, Microsoft might be able to do that whether Nokia is successful or not as there are more companies willing to build Windows Phones.
I believe that Nokia should continue to design and market Windows Phones, however, the company should probably look at the possibility of building Android phones too. This would be just like Android phone-makers starting to diversify their offerings with the addition of Windows 8 phones.
There are many people who absolutely love Nokia's phones but have problems with the operating system. The company should be able to offer an alternative - outside of Symbian - for these users too. Earlier on, the battle lines were drawn clearly as Samsung was committed to Android and Nokia was committed to Windows. However at the moment, the lines are not as clear. If Samsung has the intention to steal market share of Windows Phones, Nokia should respond by attempting to steal market share of Android.
I am definitely not saying that Nokia should drop the Windows Phone project in favor of Android, however, it wouldn't hurt if the company released one or two Android phones on top of its Windows Phone portfolio. Demand for Android phones is very strong and it will continue to be strong at least for the next 5-6 years. If Android phone-makers didn't cross the line, I wouldn't have suggested Nokia to do this, however the battle lines are already crossed.
I don't know the exact details of the agreement between Microsoft and Nokia. There might be a line or two that ban Nokia from designing Android phones. If there is no such thing, Nokia should definitely launch at least one Android phone at least to see the reception it will get.
On a related note, I am not too worried about the fact that Lumia 900 will not get Windows 8. The phones will get Windows 7.8 instead of Windows 8, and this should be good enough for the time being. Many people think this will be a huge problem for the company, however, one should keep in mind that not all operating systems offer free upgrades. Many times, phone owners have to upgrade their phones in order to receive the next version of the operating system, and the situation is not unique to Microsoft or Nokia. I believe that the media has exaggerated the problem here.
I'm still long Nokia, not necessarily because I believe that the company will be a huge success, but more because Nokia's bankruptcy is already baked in the company's share price and anything short of bankruptcy would be welcomed greatly by the investors. If Nokia turns profitable during the next couple years, the shares will definitely take-off and there will be plenty of upside for the investors. I bought Nokia for $5 a while back, however my breakeven price will be around $3 given the call options I've written and dividends I've collected from the company. If the company posts profit in one of the next few quarters, I will be happy to increase my Nokia shares.