Could Nokia's Comeback Be Tied To The New Lumia, With Possible Release Next Month?

| About: Nokia Corporation (NOK)

After Microsoft (NASDAQ:MSFT) sent the finished version of Windows 8 to manufacturers and other partners last week, Nokia (NYSE:NOK) might be well on its way to releasing the first Windows 8 phone ever as early as next month. The rumor has it that the company will be announcing its next Lumia on September 5 or 6, during its traditional Nokia World event. There are also rumors regarding Apple's (NASDAQ:AAPL) iPhone, which claim that the phone will be announced on September 12 and released to markets on September 21. Historically, Apple has been good about keeping the time gap between product announcement and product release very small. Nokia just might do the same next month.

During the first couple weeks of September, a lot of mobile phone companies will be making major announcements. Every company wants to push its next product in the markets before the holiday season kicks off. Last year, many companies, including Apple and Google (NASDAQ:GOOG), posted all-time high smart phone sales during the holiday season. While Nokia will definitely want to get a piece of that pie, its voice might be stifled, as there will be a lot of noise from its competitors around the same time. Nokia will have to leave very little, if any, time gap between announcing its Windows 8 phone and actually launching it to market.

The company's flagship Lumia smart phone sold 4 million copies in the last quarter. While this may sound like a small number, it is important to note that these phones were available in limited markets, and many consumers have been holding off on purchasing a new phone until the Windows 8 phones are released.

Additionally, in the U.S., AT&T (NYSE:T) is the only service provider that sells Nokia's Lumia 900. There is a lot of anecdotal evidence demonstrating that AT&T hasn't done a good job of marketing these phones. Last week, I also shared a personal story supporting this argument. Apparently as the former largest mobile phone company in the world, Nokia continues to have visibility problems in the U.S. Recently, the company has cut down spending on research and development while ramping up spending in the marketing department. On a positive note, the future version of the Lumia is expected to be available in more countries under more carriers. This should definitely help the sale of the new Lumia on the Windows 8 platform.

The new Lumia is expected to be much more powerful than any of its predecessors. Unlike for Windows 7 phones, Microsoft specified no hardware limitations for Windows 8. As Nokia will have more freedom in hardware specifications, its next Lumia phone should have a ton of potential.

Last week, Nokia also announced a new partnership with Groupon (NASDAQ:GRPN). According to the deal, Nokia's mapping system will be able to pinpoint the locations where Groupon deals are available, and provide road directions to get to those locations. Furthermore, the new Lumia will come with Pureview technology, allowing it to take high quality photos. Nokia continues to differentiate itself from the competition by offering a range of unique products, services and features not found anywhere else. On top of these offerings, Nokia's phones are considerably cheaper than Apple's and Samsung's, for example.

What does all this mean for Nokia's investors? The implications are mixed at the moment. If Nokia's share price was around $5 or $6, I might have been bullish on Nokia, however it is hard to remain so when the stock trades for less than $3 per share. Even after the recent rally, Nokia still trades for prices that imply an almost certain bankruptcy for the company, as it trades for less than what its patents are worth.

This may be one of the most important times in Nokia's more than hundred-year history. Windows 8 could well determine the very fate of the company in the next few years. If Windows 8 turns out to be a success for Nokia, the company's share price can easily triple. If it turns out to be a disappointment, the company's very existence will come into a question. While I am cautiously optimistic for Nokia, I recommend that investors keep an eye on the company for the next 6 months or so to see how things progress.

Disclosure: I am long NOK, AAPL, MSFT, GOOG, T.