Nokia (NOK) and AT&T (T)are gearing up for the release of the Lumia 900, and despite all the hype by both companies about this smartphone, I suspect it still may not outshine other products on the market.
The Lumia 900 is due to be released on April 8th, and will retail for $99.99. It’s being touted as one of the first 4G LTE Windows Phones in the world by AT&T. While both Nokia and AT&T stand to improve their bottom lines with this latest smartphone, Nokia stands to lose the most. That’s because it has lagged other major players in the mobile phone manufacturing market, such as Apple (AAPL), Research in Motion (RIMM) and Samsung.
Nokia has seen its revenues decline consistently since July 2008, when they were $24.1 billion. Now revenues have fallen to below $15 billion. The same is true for the company’s earnings per share. In March 2011, they were $0.09, and now they are less than one cent.
Margins have also weakened since last year. Its gross margin was 30.67% in March 2011, and now they are around 29%. Nokia’s profit margin was 8.39% and has now fallen to less than 1%. This reflects the lackluster response its phones have had as it fights for market share.
I believe these fundamentals can only be improved by a major improvement in the company’s sales. I think the Lumia 900 is a significant step in the right direction. I’m curious about how much more appealing the Microsoft (MSFT) powered platform will be for the phone. Microsoft’s Windows 8 software will also be on Nokia’s tablet it plans to unveil by the end of the year.To continue reading, click here.