Nokia WP8 Comes To Verizon And T-Mobile

Oct. 9.12 | About: Nokia Corporation (NOK)

The anticipation for one of Nokia's (NYSE:NOK) Windows phones at Verizon (NYSE:VZ) had been going on for a long time. After making its flagship phones, Lumia 900 and Lumia 920, exclusive to AT&T (NYSE:T), Nokia decided to give its Verizon using fans something to look forward to. One of the company's newer phones, Atlas, will reportedly come to Verizon.

The leak comes from the same Twitter account that posted the leaked photos of Lumia 920 before the phone was announced. The phone will run on Windows 8; however it will not have the same software specifications as the Lumia 920. The phones specifications are closer to those of Lumia 820, which is one lower version of the company's flagship phone. Hopefully, Nokia will also introduce a Lumia 920-like version of the Atlas phone for the Verizon users. It would be a shame if the company only introduced one version of the phone. I understand that Nokia has some exclusivity agreements going on with AT&T; however, Verizon should get similar terms from Nokia if Nokia wants to sell as many copies of its Windows phones as possible. The company keeps quiet about the Atlas phone for the time being.

A company that is desperate for positive cash flow shouldn't shoot itself on the foot by limiting itself to only a portion of customers in a country. As I've already mentioned many times before, Nokia's marketing strategy appears to be weak. Ilari Nurmi, the company's marketing chief (in the smart phones division) just left the company a few days ago without providing details. I wonder if he was asked to leave because of low performance, or if he didn't see any light at the end of the tunnel before deciding to leave. We will probably never know why he left, but I hope that his replacement will shake things around in Nokia's marketing department.

The company announced that T-Mobile would have exclusivity to Lumia 810. Starting November, having phones with AT&T, Verizon and T-Mobile will give Nokia access to more than 75% of the market in the US. This is much better than the market exposure enjoyed by the company's previous flagship phone Lumia 900, which was around 35% with AT&T alone. If the phones sold by AT&T and Verizon end up being different but equal in specifications, this might be a good thing rather than a bad thing, because this would present the buyers with two options to pick instead of one. If the phones sold by one company end up being better than the other, this will create a disadvantage for one of the companies and possibly hurt the sales of Nokia's high-end smart phones. The company needs to be very careful about this.

The new generation of Windows Phones should hit the market soon after the launching of the operating system by Microsoft (NASDAQ:MSFT) in San Francisco on October 29. At first, the phones will hit the markets in the US and some Western European countries, because these countries will be in the holiday season when the most electronic devices are sold. The other parts of the world such as Asia and Middle East might not care too much about the holiday season with the exception of New Year's. As long as Nokia's phones make it to these markets before New Year's, it should be fine.

If Nokia's Verizon phone really looks like the picture above, given a choice between Atlas and Lumia, I would opt for Lumia. Atlas doesn't have the unique look of the Lumia phones. The rounded corners of Atlas might make the look like some of the competitor's phones and that's the last thing Nokia needs today. The company is good at differentiating itself from the competition in terms of design, applications and hardware, and this should be the company's marketing focus too.

If Nokia returns to positive cash flow in 2013, this will be extremely bullish for the stock price. Many investors and analysts still see Nokia going bankrupt soon, and the company's current and average target share price reflects this extremely negative sentiment. I think Nokia will pull a surprise soon by selling far more phones than analysts expect it to. Excluding one-time costs, the company might have positive margins starting next quarter. I am long Nokia and I continue to have faith in the company, mostly due to the high quality of Nokia products. I can't recall the last time a company went bankrupt producing such high quality products.

Disclosure: I am long NOK, MSFT, T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.