I recently wrote an article about Microsoft (NASDAQ:MSFT), outlining the positive potential of their upcoming ecosystem and how it could mean great things for the company. A key piece of the Microsoft ecosystem that wasn't mentioned relates to the new Windows 8 phones that will be released by Nokia (NYSE:NOK).
The Lumia 920 will be Nokia's flagship phone, as well as the top-of-the-line Windows 8 smartphone. This phone will be superior to all other smartphones if it truly does have all of the features Nokia claims it will. The new handset will even be able to run Microsoft Office, giving it the ability to differentiate itself when business execs are out shopping for new phones. The Lumia 920 will give the iPhone 5 and Droid smartphones another serious competitor.
As Apple (NASDAQ:AAPL) introduces its new charger that renders all previous accessories useless-unless the consumer shells out extra money for an adapter-Nokia is introducing inductive, wireless charging. This could create a new "cool" factor for the Lumia, swindling some cool status away from Apple. The accessories for the new Nokia handset are just as innovative. Premium speaker maker JBL, for example, is releasing speakers for the Lumia 920-and all the consumer has to do to charge their phone is set it on top of the speakers while playing their favorite music.
After Apple's recent mapping blunder, CEO Tim Cook basically told users to use mapping apps by other companies. How does Nokia's mapping look? Besides location and mapping service partnerships with Oracle, Ford, Amazon, Hyundai, Microsoft Bing, Yahoo maps, Garmin, Mercedes, and an extremely longer list of customers, they look pretty good. Even better is the new "augmented reality" app that will be utilizing Nokia's superior mapping technology to make GPS and location services exciting again.
"With Nokia City Lens you can discover all your city has to offer around you, just by looking through your camera display.
Just hold your phone up and watch nearby restaurants, hotels, and other businesses pop up on your screen. You can find suggestions on where to eat. Find the nearest bars. Then read reviews, get phone numbers, link to websites or create a list of places to visit another time."
City lens and Nokia's mapping, as well as turn-by-turn navigation, will be the best in the industry, and may add to the "cool" factor aura that Nokia may be able to create. If Nokia has finally developed a hit smartphone that is capable of stealing away market share, it could receive an even bigger boost in sales if Microsoft has a winner in Windows 8. Nokia is a piece of Microsoft ecosystem, and a vital one at that. If both companies get it right, it could create a perfect storm that could propel both companies quicker than most think is possible.
Too bad the Lumia 920 is going to be released exclusively on AT&T (NYSE:T). As previously pointed out by a fellow Seeking Alpha contributor, this may be a critical mistake. Nokia is restricting the amount of customers able to buy the Lumia 920 significantly, and no matter how superior the handset is, many people will never know because they don't have AT&T as their carrier. Sure, AT&T could promote and advertise the hell out of the Lumia 920, but this didn't seem to work out very well with the previous model, and I have a feeling the majority of non-AT&T customers will not make the switch just to use a new and unproven smartphone.
Even with this potential error, however, the Lumia's situation is different this time. With the bigger and better Microsoft Ecosystem (that will most likely be able to not only rival Apple and Androids (NASDAQ:GOOG) ecosystems, but maybe even prove to be superior to them) more apps will be readily available and there will be other incentives for purchasing the handset. The Lumia 920 also has the potential for being the next cool thing-wireless charging and augmented reality are unique and innovative. They also have a pipeline of accessories coming to accompany the Lumia that are also innovative and uniquely interesting.
As an investor in Nokia, I am disappointed so far-not with Nokia's products-but with the way they are handling themselves. The advertising is non-existent, the customer base is handicapped with only one wireless carrier as an option, and I feel as if the company is becoming a waste of potential.
Still, a hit is a hit. If the phone is a success, along with a successful Windows 8 release (providing a superior ecosystem to back the handset up), the hit could be a blow to the traditional Goliath-like, two-party dominance Android and Apple currently enjoy. David only had to fight one Goliath, if he had to fight two of them it may have been a different story. Still, there is room for more than two players in the smartphone market and if deeply-discounted Nokia comes out strong when they launch their new handsets, they may be able to live in peace with the two current giants and make a comeback as a successful smartphone maker.
Disclosure: I am long MSFT, NOK. 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.