Nokia (NYSE:NOK) announced its partnership with Microsoft (NASDAQ:MSFT) last year after seeing its Symbian operating system lose customer appeal and its market share decline. The company launched its Lumia line of smartphones based on Windows Phone OS last quarter, which got off to a solid start. According to a recent report from Strategy Analytics, it became the largest Windows Phone player in just one quarter. 
However, Lumia’s sales could not revive Nokia’s fortunes last quarter, as stiff competition from Apple (NASDAQ:AAPL) and Google’s (NASDAQ:GOOG) Android based smartphones resulted in overall weak sales for the company (see Lumia Lights Up Earnings Though Symbian’s Legacy Sinks Stock).
Our $6.50 price estimate for Nokia stock is about 10% above the current market price.
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Nokia – the Largest Windows Phone Player
Windows Phone 7-based device shipments were up 36% compared with the third quarter, reaching 2.7 million units. Nokia took the top spot among vendors, securing 33% market share with 900,000 units sold. Nokia’s growth was driven by an expanded portfolio of Windows Phone 7 models such as the Lumia 800, an increased retail presence and highly visible marketing campaigns across several European and Asian countries, according to Strategy Analytics.
But Struggles Continue for The Company
Becoming the largest Windows Phone player is by no means an indication of a revival at Nokia. Nokia’s fortunes in the smartphone market continue to decline rapidly to the benefit of Apple and Samsung. Nokia’s global smartphone market share declined from 33% in 2010 to 16% in 2011, while Samsung’s increased from 8% to 20%, and Apple’s increased from 16% to 19% during the same period. Nokia still has a lot of lost ground to make up for and Lumia seems like its biggest bet going forward.Notes:
- Nokia Becomes World’s Largest Microsoft Smartphone Vendor in Q4 2011, Strategy Analytics, February 24th, 2012 [↩]