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Lumia 920, the flagship device of Nokia Corporation (NOK - Analyst Report), is leading the Windows OS (operating system)-based smartphone market, dethroning Lumia 800. According to media reports, premium Windows-based phones have gained popularity and have reached the top.

Per the report, Lumia 920 currently dominates 14% of the market but has a slender lead over Lumia 800. The latest device from Nokia leaped ahead from its 4th spot last month. Availability of stocks, which was a major problem immediately after its launch, has led to improved sales.

Lumia 920 and 800 is being closely followed by Lumia 710 and 610 with market share of 13% and 11%, respectively. Notably, Nokia has 8 among the top 10 Windows-based devices, the other two being retained by HTC Corporation of Taiwan.

In the last couple of years, Nokia has lost significant market share to Apple Inc.’s (AAPL - Analyst Report) iPhone and a gamut of other smartphone manufacturers who are using Google Inc.’s Android platform. The company joined hands with Microsoft Corporation (MSFT - Analyst Report) to produce Windows-based devices.

Initially, the partnership didn’t yield any meaningful results and Nokia continued its struggle in the smartphone market. However, in the last quarter, the company performed impressively based on a good show from its Lumia series. Presently, Nokia captures almost 80% of the Windows-based smartphone market.

Windows’ latest smartphone OS, Windows Phone8 (WP8) is also performing well in the developed countries of France, USA and Canada. WP8 controls 43% of the Windows phone market and registered a 12% sequential growth this month.

But the latest OS still lags its predecessor Windows Phone7 in some countries including India, Italy and Spain. In an attempt to overcome such a market situation, Nokia is launching low-end WP8-based devices, Lumia 520 and Lumia 720.

We believe that with no competition in sight, Nokia Lumia is expected to dominate the Windows-based smartphone market. Lumia 920 could become the preferred customer choice given its large screen, great imaging and mapping features. Nevertheless, it remains to be seen how Nokia reacts to the improved Windows phone line-up of bigger rivals like Samsung and HTC.

Nokia currently carries a Zacks Rank #3 (Hold).

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