Weekly Mobile Notes: Apple and Nokia

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Apple

The past week saw quite a few developments in the mobile sector. Apple (NASDAQ:AAPL) became only the sixth company ever to top a market cap in excess of $500 billion Tuesday, rallying by more than a third since the start of the year. The expected launch of the iPad 3 on March 7th is adding fuel to the post-earnings frenzy. Meanwhile, Nokia (NYSE:NOK) became the largest Windows Phone player, merely a quarter after it launched its first smartphones to run on Microsoft’s (NASDAQ:MSFT) mobile platform.

Apple

Investors continue to lap up the Apple phenomenon. In the five weeks that have passed since Apple released its FY 2012 first quarter bumper earnings, the stock has seen tremendous buying interest, rallying more than 30% and crossing the enviable mark of $500 billion market cap Tuesday. This launches Apple into the rarefied strata of only five other companies so far that have ever commanded this valuation. One of the main reasons for the huge sustained rally that we are seeing is that the markets are expecting Apple to launch the iPad 3 on March 7, along with a rumored Apple iTV.

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Retailers such as Best Buy have started to slash iPad 2 prices in a bid to clear off their inventory. It is common for retailers to slash the prices of electronic products in anticipation of the arrival of their upgraded versions. (see Retailers Slash iPad 2 Prices Ahead of Anticipated iPad 3 Launch) The iPad 3 could support 4G technology which means Verizon and AT&T will be able sell them on their 4G networks, in a bid to accelerate 4G adoption.

Apple also won a major appeal against Motorola’s injunction that may have halted iPhone and iPad sales in Germany. Earlier this week, a court ruled that Motorola can’t enforce standard-essential patents against Apple in Germany. (see Apple’s Victory Over Motorola in Essential Patent Case is Huge)Motorola was dealt another blow on Thursday when Apple won an injunction against all Motorola phones that violate one of its patents. [1] These are huge victories for Apple and consequently big losses for Google, which is looking to complete its Motorola acquisition by the middle of this year. Google has maintained that its primary reason for acquiring Motorola Mobility is the treasure trove of patents that it would get, helping it better defend Android from Apple and Microsoft.

See our complete analysis of Apple here


Nokia

It’s been just over a year that Nokia first announced its partnership with Microsoft 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 about three quarters later, which got off to a solid start selling just under a million units in about two months. According to a recent report from Strategy Analytics, it has now became the largest Windows Phone player after just a quarter in the market.

However, Lumia’s sales could not revive Nokia’s fortunes last quarter, as stiff competition from Apple and Google’s Android based smartphones resulted in overall weak sales for the company (see Nokia Still Struggles Despite Being the Largest Windows Phone Player).

Earlier this week, Nokia unveiled a cheaper smartphone based on Microsoft’s Windows Phone operating system, although the market was disappointed with the price point. Nokia announced that its new Lumia 610 model would be priced at 189 euros ($250), excluding subsidies and taxes, when it goes on sale next quarter. We believe that Nokia should have come out with an even lower smartphone price, as a number of low-cost Google Android vendors such as Huawei and ZTE sell smartphones in $100 range. (see Nokia Seeks to Gain Market Share at Android’s Expense)

See our complete analysis of Nokia here

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Notes:
  1. Apple wins injunction against Motorola in Germany, Engadget, March 1st. 2012 []