China Mobile Limited (CHL - Snapshot Report), the largest telecom carrier in the world, has launched a customized Lumia 920T for its customers. Lumia 920T became the first Windows-based smartphone that runs on China’s national grown technical standard TD-SCDMA (Time Division Synchronous Code Division Multiple Access).
Lumia 920T shares almost identical features with the one offered in the Western countries. It possesses Pureview’s advanced floating lens technology and Nokia City Lens, which offers bright picture and advanced location service respectively.
Furthermore, Lumia 920T integrates with Chinese web service providers like, Sina, Sohu, Tencent, Baidu and will provide access to two of the most famous application stores of China. China Mobile’s customers can avail the phone by the end of the year and will cost them around $739, if bought from retail market.
Grappled with increasing pressure from Apple Inc.’s (AAPL - Analyst Report) iPhone and other Android-based phones, Nokia Corporation (NOK - Analyst Report) tied up with tech giant Microsoft Corporation (MSFT - Analyst Report) in 2010 to offer Windows-based phones. However, the partnership has not yet delivered any meaningful result for the company.
Nevertheless, since November, things seem to improve for the Finnish handset manufacturer. Nokia recently reported that it has seen strong demand for Lumia 920, since the device became available in early November and went out of stock at online retailer Amazon Inc. (AMZN - Analyst Report). AT&T Inc. (T - Analyst Report), Nokia’s exclusive partner for its flagship device has also reported that it only has the white model left in its shelves.
Nokia is also doing well in other parts of the world particularly in Germany and Australia, where the company has experienced sellouts of its flagship Lumia 920. The tie up with China Mobile has come at the right time for the Finnish handset manufacturer as tapping the biggest carrier in the biggest smartphone market will help Nokia to increase its market share in the country.
Armed with a more than billion plus population and a 3G penetration of as low as 19%, China provides huge growth opportunity for Nokia. However, Nokia reported lackluster results in China in the third quarter, with sales declining 62% year over year. Partnering with China Mobile and using the company’s own technical standard will help Nokia to win back its lost market share.
China Mobile and Apple are still having some issues over the company’s TD-SCDMA standard and the revenue sharing policy, which is delaying the carrier’s iPhone launch. We believe teeming up with the biggest carrier in the country will allow Nokia to grab some of the impatient Apple customers in the Mainland.
We retain our long-term Neutral recommendation on Nokia Corp. However, it holds a Zacks #2 Rank, implying a short-term Buy rating. China Mobile also holds a Zacks #2 Rank, implying a short-term Buy rating.