Risks Behind the Nokia Corporation (ADR) (NOK)-Microsoft Corporation (MSFT) Partnership

The market might not at the moment see it, but tech companies are viewing Apple’s new-found bearish disposition as a huge opportunity to close in on its market share. I am inclined to believe that Microsoft is also eyeing, albeit from a distance, the opportunity. And if Nokia is a liability, it may choose to close in on the loose hanging market share with another device maker.

Low end market however saves the day

For a moment, Nokia seemingly appears to be in a coal black gutter of incertitude. Nonetheless, it did pick up something from its first big fall; the fall that pushed it toward the fringes of the market.

Nokia has a contingency plan, not just any contingency plan, but a plan that could in itself help the company re-emerge at the top of the industry.

Slowly and slowly, Nokia Corporation (ADR) (NYSE:NOK) is re-emerging as a top player at the low end of the smartphone market. Here, it does not need Microsoft Corporation (NASDAQ:MSFT)’s snappy OS. It only needs low prices and basic functionality. In the fourth quarter of 2012, Nokia managed to sell 9.5 million units of its budget Asha handsets. That marked a sequential increase of 43 percent from 6.5 million units in the third quarter.

IDC projects that, for the first time ever, smartphone shipments will outstrip feature phones in 2013. IDC further adds that China, India, and Brazil, all of which are emerging markets, will be key players in the increased shipments. Going by these projections, I can confidently say that Nokia Corporation (ADR) (NYSE:NOK) is well positioned to make a winning in the low end of the market. Nokia’s Asha handsets sell at the price of feature phones, but adapt the functionality of smartphones. This approach will allow Nokia to corner the market in emerging markets such as India, China and Brazil.


Despite the pitfalls in the Nokia-Microsoft agreement, the odds ultimately lay with Nokia. Not only does its footing in the low-end of the market promise longevity for the brand, but its belligerent Lumia marketing has also drawn in a notable number of consumers in the high end of the market.

The article Risks Behind the Nokia-Microsoft Partnership originally appeared on Fool.com.

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