Nokia Is Staging A Comeback To The Smartphone Arena

If the rumors materialize, this will be the first mobile device that Nokia will launch since selling the Mobile Phones unit to Microsoft (MSFT). Re/Code sources state that Nokia Technologies, the unit holding the mobile patents, is responsible for the conception and design of the new device. This is the leanest approach to a comeback, doing in-house design and conception, leveraging the portfolio patents and outsourcing manufacturing and distribution. 

This way the risks are reduced, but the pace of innovation is also slower. All-in-all, this might be positive in the sense that it puts a foot in the door of the smartphone market and also gives time to the company to figure out where to focus its attention.

The timing of the acquisition of Alcatel-Lucent (ALU) is also interesting, since it will bring more patents to the company and liquidity. However, ALU’s balance sheet is not that rosy and the integration in Nokia will mean a deterioration of the debt ratios.

Bottom line: Very interesting news, but the short term impact will be much reduced. All the attention will be centered on ALU’s integration in Nokia and this might be a long digestion since Alcatel has been showing very poor results for a long time.


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