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Will the Windows/Nokia Phone Succeed?

"Postscript": At the end of the day I noticed that NOK stock had gone up 13% in European trading. Gosh, I didn't know that this blog had so much clout! Being a "market mover" is just too much responsibility. (grin) 
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People who have no interest in the world of investments are missing out on a fascinating part of our culture. What's worse is that they are doomed to poverty in old age since we will probably be in a Zero Interest environment for many years to come, while real inflation cruises along at two to three times what the government officially admits to. People tend to underestimate the damage that inflation can do to their standard of living. (Unlike cynical ol' Boonie, a true optimist and positive thinker would hope to die before too many years of negative real interest rates reduced him to panhandling.)

Readers know that I'm not a qualified investment adviser, so they must promise not to take anything I say as the basis for buying or selling a stock. But any amateur is "qualified" to write about what interests them -- and that is all. Besides, my money-back guarantee for daily infallibility is restricted to the rather narrow field of sex, politics, and religion. (And camping aesthetics.)

Without a doubt Windows Phone 8 and Nokia is the business/investment situation that interests me and many others, at the moment. Wireless internet has been a rapidly growing area over the last few years and no doubt it will continue to be so. But the industry is just plain bizarre.

Since the wireless carriers (e.g., Verizon, ATT, Sprint, and some smaller fry) are so consolidated, they are in a strong position to squeeze the suppliers who actually make their telecom equipment, e.g., Qualcomm, Alcatel, Nokia-Siemans, Cisco, "Motorola" (Google), Tellabs, etc. Most financial analysts would agree about the unenviable position of the telecom equipment makers.

Here is what seems strange to me: isn't Apple just another supplier (of the wireless carrier oligopoly) that needs to be squeezed? Why then do the wireless carriers permit Apple's iPhone to be in such a strong position? Isn't it high time for Apple to be taken down a notch or two? The wireless carrier oligopoly subsidizes the purchase of iPhones to the tune of several hundred dollars for each customer who signs a two year contract. That must sting!

In olden times (2007) when the iPhone first came out, ATT had a monopoly on selling it. It was worth it to ATT to subsidize the iPhone, because smartphones caused more bytes to be consumed than dumb-phones, and with customers whipped up into a horny frenzy by Apple's brand cult, they could be distracted from the poor coverage of the ATT network. Without the sexy iPhone monopoly, most customers would have chosen Verizon in preference to ATT.

All well and good, but that's ancient history now. Google's Android has made the smartphone a commodity, although every other television commercial screams about this or that hot new phone model being unbearably cool and necessary for you to buy. Aren't they living in the past?

What isn't a commodity (I think) is seamless integration with office reports, spreadsheets, or anything else you do with your Windows office desktop computer or laptop. Although I do read many tech reviews, I still don't know if, say, the average cubicle rat in the metropolis could connect his Windows Phone 8 smartphone to a thumb drive or his Windows 8 office computer, and peck away at reports or office email while he sits in traffic.

In any case, you'd think that what would matter today is which phones the wireless carrier oligopoly chooses to subsidize. Don't they have a vested interest in promoting Windows Phone 8 and its Nokia embodiment in order to take Apple and Google (Android) down a notch or two, and make for smaller cellphone subsidies? And Microsoft wants a success in "mobile" so bad that the wireless carrier oligopoly should be able to soak It for some of the advertising expenses. Microsoft has tens of billions of dollars in the piggy bank earning squat.

Tech reviewers have a hard time believing that Microsoft/Nokia can ever get their groove back, at least in the mobile arena. They will also have a hard time believing that Apple has already reached its high-water mark. 
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After writing this post I did a little more homework on SeekingAlpha.com, and found some articles by George Kesarios on this Windows Phone 8/Nokia 920 theme. You might enjoy reading the link for corroboration from a professional analyst.

Comments

TomInOrlando said…
Didn't I just read that T-Mobile decided not to offer the iPhone due to the high cost of the subsidy. Apparently the cost outweighed the potential for new customers.
Boonie said…
Tom, that's interesting. I hadn't read that. Do you have a link?
TomInOrlando said…
I can't find where I originally read this but googling on T-Mobile and iPhone found several articles on the subject.