Despite accusations that Nokia Corporation (NOK) fumbled its Lumia 920 launch, the phone itself is absolutely solid. In fact, after Apple Inc. (AAPL) launched its iPhone 5, it became immediately clear that while Apple's new phone is high quality, it's not exactly "better" than competing phones in any meaningful way, leaving the door open to strong competition.
I know, I know: I don't "get" the Apple magic, and I'm a terrible investor for not buying Apple at $3 and holding it through yesterday's close of $691. However, as I have confessed in a number of my articles, I'm a dyed-in-the-wool contrarian looking for the next "big" thing - chasing momentum is not my modus operandi. In the world of technology stocks, it begins with looking at the technology, especially when everyone else is caught up in the euphoria of the current market leader.
Comparing The iPhone 5 And Lumia 920
On paper, the Nokia offering holds up quite well against the Apple iPhone 5:
- The dual core Qualcomm (QCOM) Snapdragon S4 is in the same class as the ARM Holdings (ARMH) Cortex A15 design found in the Apple A6 SoC.
- The Lumia has a 1280x768 resolution screen whereas the iPhone 5 "retina" display comes in at 1136x640.
- The iPhone 5's screen is 4" along the diagonal, while the Lumia 920 sports a bigger 4.5" screen
- In terms of pixel density, the Nokia phone edges out the Apple one with 332 pixels-per-inch versus 326 pixels-per-inch.
- The Lumia's rear camera is an 8.7-megapixel piece, edging out Apple's 8-megapixel camera; front camera goes to Nokia too at 1.3-megapixel versus Apple's 1.2-megapixel.
- Both rear cameras can take 1080p video and both front cameras can take 720p video.
- Apple's phone is smaller, coming in at dimensions of 4.87 x 2.31 x 0.30 versus Nokia's 5.12 x 2.78 x 0.42; Apple's is also lighter at 3.95 oz versus Nokia's 6.52 oz phone.
- Manufacturer estimate of 3G talk time comes in at 8 hours for the iPhone 5 and 10 hours for the Lumia 920 (although these numbers should be taken with a grain of salt).
While Apple has proven time and time again that it's not all about "tech specs", it is clear that Nokia has a capable phone with at least a many bells and whistles as Apple's offering.
Windows Phone 8: The Wildcard
While Nokia's phones are great, the real wildcard is whether users will respond well to Microsoft Corporation's (MSFT) Windows Phone 8. While Windows Phone 7 has slowly but surely taken share, snagging 3.2% of global smartphone market share, Windows Phone 8 will need to even more aggressively penetrate the market.
On a technical level, Windows Phone 8 is beautiful: great programming interfaces that allow software developers to easily port over apps written for Google's (GOOG) Android OS and Apple's iOS, multi-tasking, support for MicroSD cards, support for up to 64 core CPUs, and all based on the core components from Windows 8.
However, Microsoft and the Windows Phone 8 phone vendors have to deal with the following catch 22: Developers will be reluctant to target Microsoft's Windows Phone 8 if they believe that not many people will buy Windows Phone 8-based phones, and people won't buy Windows Phone 8 based phones if they believe that application support is lacking.
Luckily, Microsoft has a lot of cash to get the ball rolling (I talked about this in my article, "Microsoft - Short The Hate, Buy The Stock"), and Microsoft's historically wonderful development tools can certainly persuade developers to hop on board the Windows Phone 8 train. (Remember: the Xbox 360 beat out Sony's (SNE) Playstation 3 in the hearts and minds of developers because its platform was much easier to develop for).
Yes, Apple's iPhone lineup is great. However, Nokia's phones will be just as good, if not better. While buying Apple brings the security of the herd, Nokia, while riskier, has a much better shot of doubling or even tripling at this point. Just remember: nobody wanted Apple for the longest time, and its recovery began with small, meaningful steps. Nokia's path to recovery is looking mighty familiar.
Disclosure: I am long NOK. I may initiate a long position in MSFT over the next week.