Is Microsoft getting ready to slaughter Apple and Google with a little help from Nokia? The bloodbath is coming if a report from BGR is true.
NOK & MSFT
Lumina 900 is a high end phone from Nokia. The phone received glowing reviews at CES in Las Vegas.
The shocker is that AT&T (T) may price the phone at $99 with a two-year contract. The low price is a game changer. At present, comparable phones from Apple and Samsung are priced at $199 with a two year contract.
If AT&T lands this phone as an exclusive like it did with Apple iPhone, it will give AT&T another leg up over Verizon (VZ) and Sprint (S).
Google Android vendors such as Samsung, HTC, and Motorola are likely to get hurt more than Apple. In a small study conducted at The Arora Report, 88% of Apple iPhone users showed brand loyalty compared to 37% for Android users.
Last year Microsoft made a very large investment in Nokia. According to reports, the investment is more than $1 billion to promote and develop Windows smartphones. Under the agreement between the parties, Nokia will pay Microsoft a fee for each Windows phone. Revenues from search and advertising will be shared between the two companies.
Given the scope of the investment Microsoft made in Nokia and the cash hoard at Microsoft, it is within reason that Microsoft is willing to take a financial hit to grab a meaningful share of the smartphone market.
The foregoing also shows the risks an investor incurs when an investor gets married to Apple or Google. Conservative investors are well advised to read ‘Use proper position size management.’
About Me: I am an engineer and nuclear physicist by background, have founded two Inc. 500 fastest growing companies, and have been involved in over 50 entrepreneurial ventures. I am the Chief Investment Officer at The Arora Report, which publishes four newsletters to help investors profit from change. Please feel free to write me at Nigam@TheAroraReport.com.
Full disclosure: I am long Apple from an average of $131. I took profits on 50% of the position at an average price of $360. Subscribers to ZYX Buy Change Alert may have a similar position and may have taken similar actions.
