Sustained Support for Nokia’s Symbian Despite Microsoft Transition
Nokia (NYSE:NOK) recently announced a strategic partnership with Microsoft (NASDAQ:MSFT), in which it will adopt Windows Phone 7 as the main operating system for its smartphones. However, since the transition could take around two years, it is critical over the near-term that Nokia’ present operating system Symbian continues to gain traction. During the recent earnings conference call, management indicated that consumer interest in Symbian has not dropped. [1] This is good news for Nokia as it tries to stabilize itself and fight off competition from Apple (NASDAQ:AAPL), Research in Motion (NASDAQ:RIMM), Motorola Mobility (NYSE:MMI) and Samsung in the mobile phone market.
We maintain $11.18 price estimate for Nokia stock, which is roughly 30% above market price.
Nokia Symbian Demand Levels Intact
Nokia commented that it is making a conscious effort to support Symbian sales during the transition to Windows Phone platform. Supporting the operating system is critical for Nokia in order to avoid further deterioration to its market share, which has taken a beating over the last few years.
Here is what the management had to say:
While competitive challenges remain and the trends that precipitated our new strategy persist, we saw no immediate evidence of a sudden change in the consumer perception around Symbian…
… During the quarter, we took deliberate action in an effort to support Symbian sales during the transition to the Windows Phone platform, including work to enhance the ongoing competitiveness of the Symbian range of products. For example, we recently announced the Nokia E6 and Nokia X7, two products with the new Symbian Anna software. [1]
Our Take
Symbian Anna is Nokia’s latest software update of Symbian OS. Some of the enhanced features of Anna includes enhanced user interface, a faster browser and quicker search through Ovi Maps. This illustrates that Nokia is serious about supporting Symbian, and has sustained its investment on the software despite a transition to Microsoft’s Windows platform.
See our complete analysis for Nokia stock here
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