The past week saw quite a few developments in the mobile sector. Apple’s (NASDAQ:AAPL) stock beat its previous all-time high of $642/share in trading this week, and even managed to retain most of its gains, as rumors about an imminent iPhone 5 launch fueled investors’ optimism. With Nokia (NYSE:NOK) having announced a media event for September 5th, rumors about the launch of Windows 8 Lumia phones and the possible addition of Verizon (NYSE:VZ) to Nokia’s carrier list gained ground, lifting the stock over 15% over last week. Meanwhile, Research in Motion’s (NASDAQ:RIMM) stock fell 15% for the week as the company’s attempts to assuage concerns that the next version of its BlackBerry Enterprise Server (BES) will not support existing BlackBerry devices failed to have the desired effect.
Investors continued to lap up the Apple phenomenon this week as rumors about an impending iPhone 5 launch gained ground. Despite having reported muted Q3 FY2012 results that fell short of market expectations just four weeks back, the stock has seen tremendous buying interest, rallying more than 16% and surpassing its previous high of $642. Apple is now the most valuable publicly traded company in U.S. history, having surpassed Microsoft’s (NASDAQ:MSFT) previously held record of $616 billion with a current market cap of over $620 billion. As the stock inches closer to our fair price estimate of $700, we evaluated the various drivers that could take Apple even higher and become the world’s first trillion dollar company. (Read What Will Take Apple Past The $1,000 Mark? for more insights)
Nokia’s Lumia line could have a much bigger presence in the U.S. soon. Not only are Nokia and Microsoft planning a media event on September 5 to announce a possible Windows 8 Lumia launch, but they are also are rumored to have roped in the nation’s largest wireless carrier, Verizon, to carry the new smartphone. Verizon will not be part of the media event however, a Bloomberg source said. (see Nokia’s Windows 8 Phones Likely To Arrive On Verizon) This news comes on the heels of Richard Kerris, Nokia’s Vice President of Worldwide Developer Relations, revealing in an interview with Neowin last month that a Lumia device could soon be on its way to Verizon.  With AT&T (NYSE:T) and T-Mobile already offering the Lumia 900 and Lumia 710, respectively, adding Verizon could help Nokia’s addressable market in the U.S. surge by more than 80%.
However, Nokia faces an uphill battle against the two well-entrenched ecosystems of Apple and Google (NASDAQ:GOOG) to create a niche for itself and Microsoft. Nonetheless, more carrier partnerships and better app support to drive Lumia sales will be key to its turnaround hopes.
RIM’s BES troubles
Several conflicting reports have emerged in the last couple of days regarding RIM’s upcoming BlackBerry Enterprise Server 10. With RIM preparing to launch the enterprise server simultaneously with new QNX-based BB10 devices in Q1 2013, concerns were raised about the compatibility of the BES 10 with older BlackBerry devices. RIM sought to clarify the concerns with a statement on Wednesday that the company would provide an upgrade to the BES that will not only be compatible with its current line of smartphones and tablets, but also support iOS and Android devices. However, the transition path may not be very smooth according to BGR, which claims that the enterprises will need to run the older BES 5 alongside BES 10 to support the older devices. (see With Turnaround At Stake, RIM Needs To Support Older BlackBerries With BES 10)
While RIM hasn’t issued a public clarification yet, if BGR’s claims are true, it could make new installations costly and less desirable for enterprises. This could not only result in fewer installations of the new servers but also cause faster migration away from the BlackBerry platform. With RIM still largely dependent on enterprises for its Push Email division, which constitutes 44% of our $12 price estimate for RIM, this could be a big blow to its turnaround plans.Notes: