In the past 5 years Nokia has fallen from $40 to $2.35 and RIM has fallen from $135 to $7.30. Could either of these companies make a come back and if so which one to invest in?
A look at the reasons might help.
NOKIA - fall from grace has been due to poor management and arrogance as the world biggest phone maker. But most importantly they have had no phones in three years that have matched customer needs. Their smartphones used Symbian which had no developer pool and their low level handsets continue to sell well and that's keeping them afloat.
RIM had the same arrogance and the same lack of understanding of the market. However RIM was not focused on consumers but business where they had built their reputation through secure and robust email and texts. Their phones are still good, my son just bought one, but they have been overwhelmed by the lack of an APP world limiting their ability to use a huge range of apps that the world likes.
How are they both planning to make a come back?
NOKIA has decided to live and die by Microsoft windows phone. I think a good decision although they missed the main point. As a superb phone maker they should have chosen Android and differentiated by better products. Instead they thought the OS was all that mattered. I think the ex Microsoft new CEO long term game plan is to sell the company to Microsoft and he may succeed. They produced the Lumia a world beating phone but then MS (as it has so many times) cut the ground out from their feet by announcing that Windows 8 would not support the Lumia. Huge bad press. But all Nokia needs is a winning phone. It has the logistics and sales systems in place to go to market as its still substantial sales shows. A big change is in the air in September as they announce new products jointly with Microsoft. Its make or break time for both of them.
RIM is banking everything on the long gestating new operating system developed in house. I think its a bit late for that. The new OS will have no APPS, it might be great but people want APPS. Also they have a long period of proving this new OS and business have started the long slow shift to Android and Apple. I suspect trouble ahead frankly. Its a shame but its clear.
Where to Invest?
I think Nokia. Windows phone is gradually getting converts, and Windows 8 tight integration across platforms will help. Nokia is a good company with good sales channels. One good phone at the right price could revive their fortunes. Its high risk, but if anywhere can show double your money then this is the place.
A look at the reasons might help.
NOKIA - fall from grace has been due to poor management and arrogance as the world biggest phone maker. But most importantly they have had no phones in three years that have matched customer needs. Their smartphones used Symbian which had no developer pool and their low level handsets continue to sell well and that's keeping them afloat.
RIM had the same arrogance and the same lack of understanding of the market. However RIM was not focused on consumers but business where they had built their reputation through secure and robust email and texts. Their phones are still good, my son just bought one, but they have been overwhelmed by the lack of an APP world limiting their ability to use a huge range of apps that the world likes.
How are they both planning to make a come back?
NOKIA has decided to live and die by Microsoft windows phone. I think a good decision although they missed the main point. As a superb phone maker they should have chosen Android and differentiated by better products. Instead they thought the OS was all that mattered. I think the ex Microsoft new CEO long term game plan is to sell the company to Microsoft and he may succeed. They produced the Lumia a world beating phone but then MS (as it has so many times) cut the ground out from their feet by announcing that Windows 8 would not support the Lumia. Huge bad press. But all Nokia needs is a winning phone. It has the logistics and sales systems in place to go to market as its still substantial sales shows. A big change is in the air in September as they announce new products jointly with Microsoft. Its make or break time for both of them.
RIM is banking everything on the long gestating new operating system developed in house. I think its a bit late for that. The new OS will have no APPS, it might be great but people want APPS. Also they have a long period of proving this new OS and business have started the long slow shift to Android and Apple. I suspect trouble ahead frankly. Its a shame but its clear.
Where to Invest?
I think Nokia. Windows phone is gradually getting converts, and Windows 8 tight integration across platforms will help. Nokia is a good company with good sales channels. One good phone at the right price could revive their fortunes. Its high risk, but if anywhere can show double your money then this is the place.
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