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There's a lot of angst on Wall St. right now where Nokia (NYSE:NOK) is concerned. Shorted shares now account for more than 9% of Nokia's available float, an increase of 45% over the last two reporting periods. Analysts have a laundry list of complaints: the Lumia's SRP, the unproven Win8 platform, Nokia's burn-rate, et cet.

However, I have yet to discover any analysis that focuses directly on the consumer. Things like Nokia's burn-rate ($300 million a month) are certainly important, but they wouldn't be as important if consumer interest was high.

Rather than assume that I already knew what the consumer would do, I decided to take a look at what little empirical data that was available on the subject. The results were intriguing: The new Lumia 920 looks less like a failure-on-launch, and more like a sleeper hit.

A Rising Tide Lifts All Boats

The size of the smart phone market has increased from 108.3 million units in Q2 2011 to 154 million units in Q2 2012. At the same time, Samsung (OTC:SSNLF) has increased its share of the market by crowding out the remains of RIM (RIMM) and Symbian.

The widespread adoption of all things mobile means that the binary division of the smart phone market into "Apple" and "Android" is increasingly irrelevant. The up-sizing of the mobile market allows new market entrants to essentially skip taking on Apple and focus solely on pillaging Google's (NASDAQ:GOOG) hardware vendors.

Despite Nokia's opportunism over the Apple Maps brouhaha, 87% of current iPhone users are sticking with the iPhone, no matter what. Targeting Apple directly would result in less than 3% share of the mobile market for Nokia.

(click to enlarge)

(Courtesy of AppleInsider)

Nokia's real target of opportunity is the Samsung Galaxy S3. When you compare the performance reports between the Galaxy S3 vs. the Nokia Lumia 920 in Europe, where 50% of the population has yet to own their first smart phone - it quickly becomes evident that Nokia's camera technology is a game changer.

The video comparison between the Galaxy S3 and the Lumia 920 made by Mobilegeeks demonstrates just how jarring the difference is. If the Galaxy S3 is the Volkswagen Beetle of mobile handset photography, the Lumia 920 is a Porsche 918 Spyder.

Survey Says...

The following Wired News poll reveals the impact that glowing product reviews have had on the tech-savvy portion of the market.

(click to enlarge)

The second survey is from WPCentral. Out of 7,568 respondents interested in the Windows 8 mobile OS platform, Lumia 920 is the overwhelming favorite, with 81.4% of the vote. 7.44%, said they'd buy the Samsung Ativ S, and only 3.41% gave their votes to the HTC Accord.

The last survey is from CouponCodes4u.com. This self-explanatory site surveyed 2,371 smart phone owners between the ages of 18-35 who use their phone on a daily basis, whether for work or at home, whether or not they'd switch from their old phone to the Lumia 920. (A note on the data: 39% of those surveyed own iPhones, 31% own an Android phone, and 29% owned a BlackBerry.) The result? 52% would skip it, 35% would switch, and 13% said that it would depend on the price - for a total of 52% against, 48% for. 65% were "impressed" with the new Lumia, and 87% thought it was "a big improvement."

Conclusion

The negative reaction of analysts to Nokia's new line of smart phones doesn't appear to reflect the intentions and decision-making of consumers; rather, it appears to reflect the belief system that the Apple/Android dichotomy will continue to define the smart phone universe, simply because it has done so in the past. That being said, it's entirely possible for Nokia to have the best product on the market and burn shareholders at the same time if Nokia's management doesn't get its house in order.

Recommendation: HOLD

Source: The Reports Of Nokia's Demise Have Been Greatly Exaggerated