Nokia’s New Year Resolution: Spread Carrier Love

by Trefis Team
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Nokia (NYSE:NOK) will look to forge strong relationships with each of the U.S. carriers this new year as it plans to re-enter U.S. market with the new WP7-powered Lumia series of smartphones. The Finnish company has already set the ball rolling with the announced launch of its low-end smartphone, the Lumia 700, on T-Mobile’s network January 11th. However going forward, the company will need to rope in larger wireless carriers such as Verizon (NYSE:VZ) and AT&T (NYSE:T), and we believe that releasing smartphones with LTE-capabilities will be a vital play in that regard.

Microsoft’s current Windows Phone 7.5 doesn’t have LTE capabilities. However, the software giant is apparently working on several new LTE enabled Windows Phone devices, which will be launched in early 2012. [1] The Consumer Electronic Show (CES), to start next week, will most likely see the official unveiling of several of these LTE enabled devices, one of which will be the Nokia ACE.

See our complete analysis for Nokia stock here


Carriers want LTE? We’ll give them LTE

A big reason why Nokia had failed in its earlier U.S. attempts was the lack of a good relationship with the carriers, who have been the backbone of a burgeoning U.S. smartphone industry. (see 2012 Will be Nokia’s Year of Reckoning) However, Nokia seems to be addressing that concern this time around by catering to their individual requests.

The ACE will be the second Windows Phone from Nokia to land stateside and is expected to be launched on AT&T before mid-2012. [1] Verizon recently stated that it would expand its Windows Phone offerings only after they launched some LTE devices.

Bringing more carriers into its fold will help Nokia target a wider audience as well as give its customers a larger choice of networks to choose their Nokia smartphones from.

Besides, adding LTE capable handsets to its portfolio will also help Nokia differentiate itself from the iPhone as well as help it compete with Samsung and HTC, who have been selling LTE-capable Android phones since last year. Nokia’s market share in developed markets has been declining steeply in recent quarters but a strong U.S. presence will help it stem losses going forward. A lot depends on how Nokia leverages its Microsoft partnership to build out a strong smartphone portfolio for the U.S. market and then convinces carriers to promote them.

Developed markets account for over 13% of our $6.84 price estimate for Nokia. Our Trefis price estimate is nearly 45% ahead of Nokia’s current market price.

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Notes:
  1. Exclusive: Microsoft’s LTE Plans for Windows Phone, WinSuperSite, Dcember 29th, 2011 [] []
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