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TheStreet Open House

AT&T Deal Could Shake Up the Apple/Google Duopoly

NEW YORK ( TheStreet) -- Unlike BlackBerry (BBRY), Nokia (NOK) and Microsoft (MSFT) refuse to succumb to the seemingly unstoppable market dominance of Apple (AAPL) and Google's (GOOG) Android platform.

In fact, the Nokia-Microsoft partnership appears to be thriving. AT&T (T) announced an exclusive carrier deal for the upcoming Lumia 1520. The 1520 is the largest Windows phone yet, with a six-inch display.

For AT&T investors, the Lumia 1520 may result in much greater profits than you may instinctively assume.

A larger display almost assuredly means greater data consumption compared to other phones. Larger displays also attract business and power users. For users with a larger screen, many applications that only made sense on a tablet or laptop will now work great on a phone. Lumia 1520 users probably won't need to buy a seven-inch Kindle Fire from Amazon (AMZN).

The Kindle isn't a profit center for Amazon, reportedly, so I don't anticipate a profusion of pressure on Amazon even if the Lumia 1520 cuts into sales. However, for Apple and Google, it's an entirely different story.

A Microsoft-powered Lumia featuring a seven-inch screen not only competes against the iPhone but may create increased margin pressure on the iPad. The same holds true for Android powered "super-sized" phones and phablets like the Galaxy Note series.

Unlike the Galaxy Note, the Lumia 1520 already speaks the language of business because it's running Windows natively. The combination has the potential to reach critical mass while making room for other Microsoft phones to follow along.

T EPS Basic Quarterly Chart T EPS Basic Quarterly data by YCharts

AT&T is at the epicenter and stands to capture market share in ways unseen since the end of the exclusive iPhone marriage. That's a bold statement about a phone, especially after my plethora of BlackBerry 10 articles describing why one phone doesn't matter. The difference is that this is but one of many game-changing phones coming from Nokia.

Regardless if you're reading this article from your office or from home, if you're on a desktop it's probably a Windows or an Apple machine, leaving Google as the odd man out. It's a short bridge for AT&T wireless reps to sell an existing Windows user a large-screen Windows phone compared to the Galaxy Notes-running Android.

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