Nokia's Genius Move: Was It Wrongly Viewed As A Catastrophic Mistake?

| About: Nokia Corporation (NOK)
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Everyone was looking forward to Nokia's (NYSE:NOK) September 5th event, drooling over the possibilities of innovative Windows Phone 8 devices. The buzz built up leading to the event, and Nokia, on the most part, didn't disappoint. It's hard for anyone to say that the Lumia 820 and the Lumia 920 are not high quality, innovative devices. In fact, many analysts and tech experts believe that Nokia's phones are the most innovative of the plethora of smartphones released recently. I'm not going to spend time describing the devices; I'll leave that to the experts, check out these links: Lumia 820, Lumia 920. Let's move on to the meat of this article.


The purpose of this article is to address Nokia's seemingly biggest mistake: the late release of its Windows 8 devices. Many criticize this as being the last nail in Nokia's coffin, even though it had a gold mine ready to excavate (its new WP8 line). Because they believe that management has botched another important release, many investors are furious. However, I see things very differently.

New Lumia Release Date

It is rumored that the 820 and 920 are set to launch in the US at the start of November. Many analysts see this as a disaster, and they have a good point. For once (in a really long time), Nokia has announced smartphones that look more appealing than Apple's (NASDAQ:AAPL) iPhone, as well as other competitors' offerings (including Motorola's recent Google Android (NASDAQ:GOOG) models and Samsung's (OTC:SSNLF) Galaxy Note II). These analysts cannot believe that Nokia is not taking advantage of this by releasing its smartphones before or at the same time as its competitors. As of now, Apple's iPhone is said to be generating record preorders, and Nokia is not capitalizing on any of this upgrade demand. These analysts argue that by the time the phones come out, they will have been forgotten, and their features will look stale.

Was it Planned?

But I see some logic in Nokia's actions. Many blame the late release on Windows Phone 8's incompletion, and while this may be the cause, I don't think that Nokia was in such a hurry to get its phones out to consumers. Once again, let's examine what happened with Apple's iPhone release.

Here's Apple's quote, courtesy of Engadget: "Pre-orders for iPhone 5 have been incredible. We've been completely blown away by the customer response." It is important to note that most of the preorders that happened before this was said were made in the middle of the night. My guess is that most of these early preorders were made by die-hard Apple fans. Regular customers will mostly wait until the phone is available in-store to pull the trigger. These Apple fans, or, as Android lovers would call them, "fanboys" or "iSheep," would still buy the iPhone upon release if Nokia had a paper thin, 4-day battery, 60 megapixel, quad-core, unbreakable, foldable 6-inch device available at the time. In other words, Apple was bound to have a record-breaking launch, whether Nokia's new devices were available or not. The point in all this is that had Nokia released its devices now, it would stand absolutely no chance of having impressive launch volumes. The importance of Nokia gaining momentum is too important, and Nokia did well to delay its launch (whether it meant to or not). It needs people to believe that its phones are cool and popular, and the only absolute way for people to believe that is for it to be the best-selling smartphone for a certain amount of time.

If Nokia releases its smartphones in November, it will have relatively clear skies in terms of competitors releasing devices. The iPhone will be far from fresh by then, with rumors coming out of the iPhone 5s (or 6) or and the Galaxy SIII will be old too. Therefore, if its launches go well, Nokia could go into the holiday shopping season with the most momentum, something that would do more than anything else to revive its brand and profitability. My bets are that with its eye-catching designs, innovative smartphones, the Windows 8 release, its color schemes, wireless charging, as well as its colorful accessories, Nokia stands a good chance of getting people's attention in the November-December horizon.


While many see the 820 and 920's late release date as a disaster, I see it as either a smart move from Nokia or as a lucky mistake. The company needs to enter the holiday season in a position of strength and with building momentum. With Apple's release taking all the attention (watch the media go crazy about sales numbers for the next couple of weeks), it was smart for Nokia to fight another day. In November, the skies will be more clear (as well as the media), and Nokia will have a chance to throw a hail marry in the busiest shopping season of the year.

Disclosure: I am long NOK, INTC. 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.