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Apple Inc. (AAPL), Nokia Corporation (ADR) (NOK): The Fight to Be #3 in Smartphones

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So the battle for third place in the smartphone market is getting more and more crowded. On the heels of what appears to be the successful launch of Research In Motion Ltd (NASDAQ:BBRY)‘s Z10 comeback phone and Microsoft Corporation (NASDAQ:MSFT)’s and Nokia Corporation (ADR) (NYSE:NOK)‘s partnership in new phones, we now have a new player.

Credit Apple Inc (AAPL)

Sony Corporation (ADR) (NYSE:SNE) isn’t new to the smartphone game, of course. They’ve been a player for a long time. What’s struck me as most interesting about the company’s recent announcement concerning the Xperia SP and Xperia L smartphones isn’t the phones themselves but the fact that the company says they’re trying to become the #3 maker of smartphones in the world. By my count that’s three firms, Sony, Microsoft and BlackBerry, who have all stated that as a goal recently. From the way the market is behaving there’s no actual room at the top behind Apple Inc. (NASDAQ:AAPL) and Samsung.

Seems defeatist to me. Why play for third when you can build towards second or even first. Heck, it wasn’t too long ago that BlackBerry was first. Anything can happen. Feh, or maybe it’s just a matter of companies not trying to set expectations too high. Like a presidential candidate saying that even getting 1% of the vote would be a huge victory, if a company doesn’t raise the bar too high anything looks like a win.

Anyway, the real takeaway here is just how crazy competitive the smartphone world is becoming. With the global market exploding and multiple big money players committing to their next generation of products it’s going to be an interesting time for investors. What are you to do to take advantage of a developing – and somewhat unpredictable – market?

Sony

Sony’s been in the smartphone game since about 2010. While it doesn’t get talked about as much as the sexier players, the company generally knows what it’s doing in terms of marketing it’s products and has a solid international foothold. Combine that with the fact that it’s using Android as an operating system and the app problem (not enough of them) isn’t an issue.

One shouldn’t invest in Sony just because of smartphones, though. The company makes a LOT of other consumer electronics hardware. Televisions, game consoles and such all backstop and provide a cushion should the Xperia push not pay off. The stock is up 72% since the first of December, though it’s still down quite a bit from a year ago. Combine that with a declining dividend and it’s shaky. Sony will be fine long-term, but I don’t think it’ll be smartphones that lead the turnaround.

Apple

Apple Inc. (NASDAQ:AAPL) and Samsung are the reasons no one ever talks about taking over the top spot in smartphone sales. These two are so big that it’s going to be a while – barring some sort of game-changing development – before anyone can reasonably make the statement “we’ll be first soon” other than these two.

The biggest smartphone concern I have with Apple is whether there will continue to be a steady demand for new phones at the pace the company keeps releasing them. That applies to all companies in the market, of course, but Apple Inc. (NASDAQ:AAPL) makes a big splash. I expect the lines to continue declining for release day events and sales to remain strong. In addition, I still think that Apple Inc. (NASDAQ:AAPL) stock is undervalued and that a smart investor will get some while the media push is still undercutting it.

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