This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Nokia and Microsoft: The Tables Have Turned


Shortly after Nokia launched its first Windows Phone in the U.S. in 2012, however, something earth-shattering, yet quietly, began to happen: The non-Nokia Windows Phone licensees begun to falter.

Basically, all non-Nokia licensees of Windows Phone gave up, or almost gave up. LG Electronics surrendered after an initial launch. Samsung offers a couple of models but doesn't seem to bother marketing them. HTC offers a great model, mostly so they can reduce the impact from Microsoft's patent lawsuit. Acer... well, they were supposed to launch a model, but... Huawei? They showed a model at some trade shows, and then...

The bottom line is that Nokia is now -- depending on whose survey you count -- around 80% of all Windows Phone shipments, and is rapidly racing to 100%. Unless something changes quickly, Microsoft's licensing program for Windows Phone has become a joke, with de-facto only one customer.

It's gone so far that many analysts now estimate that Microsoft makes more money from Android phones than Windows Phones! After all, Microsoft gets a royalty from a very large percentage of the Android smartphone market.

With Nokia now at 80% of the Windows Phone market, rapidly approaching 100%, the two dangers to Microsoft's smartphone business are:

1. Nokia switches emphasis to Android -- or something else, for that matter:

Whoops! Nokia has been saying that they don't have a "Plan B" -- beyond Windows Phone. Maybe they hadn't -- in 2011 or early 2012. But now? If you don't believe Nokia has an active Plan B in place, you are probably naive.

Most likely, such a Plan B would involve Android. Perhaps it involves acquiring BlackBerry (BBRY). Perhaps it would involve acquiring BlackBerry and making a great Android phone with a BlackBerry keyboard. The possibilities are endless. Either way, Microsoft is screwed.

2. Nokia gets acquired.

Whoops again! Whether Huawei, Lenovo, Samsung or HP, Microsoft's only remaining outlet for Windows Phones may be gone. Microsoft would be screwed.

In this light, at some level, it doesn't take a lot to scare Microsoft into acquiring Nokia. Problem is, even if Nokia isn't acquired, it can still abandon Windows Phone.

2 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs