latest news on oil spill: Nokia, Microsoft may see smartphone upside

Sunday, January 8, 2012

Nokia, Microsoft may see smartphone upside

By Dan Gallagher, MarketWatch

SAN FRANCISCO (MarketWatch) ? Nokia Corp. and Microsoft Corp. may be able to ride each other?s coattails into a strong spot in the smartphone market this year, Credit Suisses analysts said Thursday.

In a pair of reports, the broker cited research among wireless carriers that are hoping that the Windows Phone mobile operating system from Microsoft /quotes/zigman/20493/quotes/nls/msft MSFT +0.86% ?will become a ?third ecosystem? in a market that is largely dominated by Apple?s /quotes/zigman/68270/quotes/nls/aapl AAPL +0.88% ? iPhone as well as the Android platform from Google /quotes/zigman/93888/quotes/nls/goog GOOG -1.39% ?.

The brokerage also upgraded shares of Nokia /quotes/zigman/162154/quotes/nls/nok NOK +7.68% ?to outperform, citing its launch of handsets for the Windows Phone platform that began with the introduction of the Lumia device late last year.

GAMES
Pick ... trade ... and win!
Join now to play in MarketWatch's quarterly earnings-focused stock competition. Face off against stock-picking pros and MarketWatch's own experts to win prizes over the coming four weeks. /conga/story/misc/fantasy-trader.html 185513

?We fundamentally believe that Nokia?s focus on Windows will allow the company to drive a recovery through 2012 in both its top-line and earnings,? lead wireless analyst Kulbinder Garcha wrote in a note to clients.

Nokia?s U.S.-listed shares were last trading up nearly 6.5% to $5.42 by midday Thursday. Microsoft shares were up fractionally at last check.

In its report, the Credit Suisse team cited its own proprietary survey of ?key executives? at wireless carriers, 85% of which said there was a need for a ?third ecosystem? in the smartphone market, with a majority of those predicting that spot going to Windows Phone.

Nook spinoff being considered

Barnes & Noble is considering splitting off its popular Nook e-book business as losses mount, Spencer Ante reports on Lunch Break.

?Our survey also showed that both subsidy and volume share is expected to be markedly higher for Windows Phone over the next 12 months,? the team wrote.

For Nokia, this could mean a revival of its smartphone business, which has fallen out of favor as the company failed to keep pace with the new devices and operating systems hitting the market over the last few years. In early 2011, newly recruited CEO Stephen Elop announced plans for the company to throw its support behind Microsoft and build handsets for Windows Phone.

The Lumia debuted to some limited markets late in the year, and is expected to expand further this year, including a launch in North America.

Garcha wrote that ?we believe that the quality of Windows platform is quite good, which, combined with Nokia?s brand, distribution, scale and IPR should enable it to capture smartphone share making it the third ecosystem behind Android and Apple.?

He predicted that the ?crossover? for Nokia would take place in the third quarter of this year, when its Windows Phone devices begin outselling those using the company?s older Symbian platform.

Philip Winslow, who covers Microsoft for the broker, wrote in another note that the software giant will not likely see a big impact to its financial results from Windows Phone, but that gaining traction in smartphones ?will serve as a boost to investor sentiment? that has faded because of the company?s lack of presence in the mobile market.

/quotes/zigman/20493/quotes/nls/msft