Weekly Mobile Note: Nokia, Apple And RIM

by Trefis Team
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The mobile sector saw quite a few developments in the past week. Nokia’s (NYSE:NOK) U.S. campaign got off to a solid start this holiday season with three of the largest national carriers in the U.S. launching their respective ‘exclusive’ Lumias. In China as well, the Finnish handset maker seems to be making headway, having roped in China Mobile for its Lumia Windows Phone 8 plans. Apple (NASDAQ:AAPL) also seems likely to launch the iPhone 5 in China before the end of the year as both China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) continued to be optimistic about securing the required regulatory approvals before then. Research in Motion (NASDAQ:RIMM) also chimed in with good news this week, announcing a January 30 media event to unveil its new BlackBerry 10 platform as well as the first smartphones on the operating system.


Nokia’s comeback in the U.S. is getting carrier support all right. Soon after AT&T and Verizon made their respective ‘exclusive’ Lumias available for sale, T-Mobile announced Wednesday the launch of its first Windows Phone 8 handsets. Along with the higher-priced HTC 8X, the fourth largest carrier in the U.S. launched the mid-range Lumia 810 at $149.99 on contract, merely days after both AT&T and Verizon unveiled their Windows Phone 8 lineup ahead of the holiday season. Sprint remains the only national carrier not to announce a Lumia yet, but the carrier confirmed recently that it has plans for the new Windows Phone 8 platform in 2013. Nokia had AT&T and T-Mobile for its debut Lumia launch as well earlier this year but the fact that Verizon is also on board now, together with Sprint’s pledged support for the platform, means that Nokia will finally have a big enough presence in the U.S. market to make it count. (see Nokia Awaits Turnaround As Lumia Now Available At Three U.S. National Carriers)

The U.S. smartphone market is extremely crucial for handset makers since success here generally translates into positive consumer sentiment in other markets. It is therefore important that Nokia figures out the U.S. market, where it has historically lagged rivals. AT&T, which is backing the Lumia to the hilt and is the only carrier to have the high-end Lumia 9xx, could use its past iPhone experience to prove an able ally in this quest to create a third mobile ecosystem. However, considering that the Windows Phone has little brand awareness currently, Nokia will need all the carrier support it can garner. Product-wise, the Lumia looks a strong competitor to other popular smartphones and giving carriers exclusive access to different custom-built Lumias could help Nokia win more carrier backing, which, together with Microsoft’s Windows push in the coming months, will be instrumental in putting more Lumias in people’s hands.


In line with Apple’s plans to make this year’s iPhone launch its fastest roll-out ever, Chinese carriers are hopeful of launching the iPhone 5 in the country before the year-end. China Telecom Chairman Wang Xiaochu, in a brief interview with the Wall Street Journal last Friday, said that the company plans to launch the device by early December or sooner. While China Unicom sounded less certain about the launch date, it has already received initial regulatory approval to officially launch the iPhone 5 in China. (see iPhone 5 Launch In China Could Boost Apple’s Holiday Quarter Results) A December launch of the iPhone 5 in China may not be confirmed news yet, but going by the three month time-frame in which Apple had launched the 4S earlier this year, it does seem very likely.

It is only a matter of time before the iPhone 5 is available on both China Unicom and China Telecom, but a deal with the much larger China Mobile remains elusive until Apple can work out a deal with the carrier. How soon that will happen is open to speculation considering the Chinese government’s possible opposition to the huge iPhone subsidies. (see Apple Faces China Mobile-Sized Stumbling Block Limiting China Upside Potential) But knowing that the carrier’s 3G growth has been hurting due to the unavailability of the iPhone, such a deal should not be too far along. This deal is also very important for Apple as it can instantly double the iPhone’s current addressable market in China and act as the next big boost to its stock given that the iPhone accounts for around 55% of the company’s stock value currently.


In what will be its first public move to revive its flagging fortunes, RIM announced earlier this week that it will unveil the new BlackBerry 10 platform at a media event January 30. RIM will hold the event simultaneously in multiple countries around the world and use the opportunity to officially announce the first two BB10 smartphones. This comes on the back of the CEO, Thorsten Heins, confirming in a press release late last month that the BB10 devices are being lab-certified by more than 50 carriers worldwide. With RIM finally seeing some good news flow in the last few weeks, its shares have shot up by almost 15% this month as confidence returned that the management will be able to deliver on its deadline this time after having missed it twice already in the past year.

However, the Q1 2013 launch implies that competitors such as Apple and Samsung will continue to munch on RIM’s market share until then and even beyond as RIM tries to generate positive market sentiment around the new devices. To add to RIM’s woes, competition in the smartphone market is only increasing with Microsoft making a reinvigorated mobile play with its combined Windows 8/Windows Phone 8 push this holiday season. However, we still see more value in the stock coming from its huge 80 million subscriber base and the unique value propositions RIM can make in push email and security. (see RIM On Its Way To $12 As BB10 Nears Launch On January 30)

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