It's Going To Take More Than Windows To Save Nokia

Sep. 5.12 | About: Nokia Corporation (NOK)

You've got to be kidding.

Today Nokia (NYSE:NOK) showcased its two new smartphones -- the Lumia 920 and 820 -- but left out the crucial info: when, where, how much, and with whom.

Don't get me wrong. The 920 sounds like it's got an incredible camera. After all, who doesn't want great pictures? (I'm not sure about the wireless charging platform. Maybe that's a game changer for some buyers. Not me.) But tell me, is this a $900 or $400 phone? Can I get it at AT&T or Verizon? Sprint? In October? November?

Those questions didn't get answered. So we're left with a phone with a great camera launching sometime in Q4 at some price by some carrier somewhere.

I do know this: Nokia spent $6 billion in R&D this year. Next to $6 billion, the product is underwhelming. Consider that Apple (NASDAQ:AAPL) spent that amount in total for all of fiscal years 2008 through 2011, developing the iPhone and iPad and $54 billion in income.

Over the last five years, Nokia's share price has tumbled 93%. Investors must ask themselves whether the Lumia 920 and 820 are the answer to Nokia's share price plunge, keeping in mind that fiercely competitive Samsung (OTC:SSNLF) and Apple are imminently set to launch their own new phones.

This isn't the first time Nokia has bet on a Windows-based smartphone. Back in 2011, Nokia launched the disappointing Lumia 800 and 710, promising to take back market share. Instead, the company has hemorrhaged $5 billion in income since that launch.

The graph below illustrates Nokia's crumbling fundamentals at a glance:

(click image to enlarge)

NOK Operating Margin TTM Chart

It's going to take more than Windows to save Nokia. This is a company in decline. Investors should stay away.

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