LTE (long term evolution)-enabled Lumia 521 is the U.S. version of Nokia’s Lumia 520 and has a 4-inch touch screen, 5 megapixel camera and is powered by Microsoft Corporation’s (MSFT) latest Windows operating system (:OS).Notably, the phone is priced at $129.99, almost $20 less than Home Shopping Network’s (:HSN) offer price and comes with T-Mobile US Inc.’s (TMUS) $30 per month unlimited data and text plan.
These types of offers attract the low-income group, particularly the youth segment, and was sold out on HSN soon after its launch in the previous week. As per the latest media report, the smartphone has received great customer response, and has been sold out within an hour of its launch on the Walmart website.
In the last couple of years, Nokia has fallen behind in the smartphone leadership race, which has been mainly dominated by iPhone and other Android powered smartphones. Initially, the partnership with Microsoft didn’t yield any meaningful result and Nokia continued its struggle in the smartphone market.
However, in the last couple of quarters, the Finnish handset manufacturer has impressively performed based on a good show from its Lumia series and currently controls almost 80% of the Windows-based smartphone market. In the recently concluded quarter, Nokia shipped 5.6 million Lumia handsets, registering a 27.3% sequential growth.
We believe this to be a significant deal for Nokia, as the no-contract plan coupled with Walmart’s huge store base will extend Lumia 521’s reach to a wider market area, thus boosting the sale of its Lumia series.
Significantly, the more users Nokia will add, the more application developers it will attract, which in turn will increase customers. However, Windows still lags behind in the application front to both iOS and Android, which could act as a threat for Nokia’s future growth.
Currently, Nokia carries a Zacks Rank #3 (Neutral).
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