Nokia (NYSE: NOK) is getting trounced by Motorola (NYSE: MOT) and Apple Inc. (NASDAQ: APPL) in the smartphone market, but that’s not stopping the Finnish mobile phone manufacturer from trying to compete. Their latest devices are having some trouble getting started—the new Nokia Twist, aimed at younger mobile users, has failed to create much buzz since its release earlier this month and the Nokia N8, the company’s answer to the Google (NASDAQ: GOOG) Android-powered Motorola Droid X and the iPhone 4, has been pushed back from its release next week to an unspecified date in October.
The Twist, the N8, and all of Nokia’s smartphones need all the help they can get, which is why investors should be pleased to hear that Nokia is putting a sizable amount of money behind the Ovi Store.
The Ovi Store, Nokia’s equivalent of Apple’s App Store and the Google Apps Marketplace, doesn’t have the same level of brand recognition as its competitors. This has inspired Nokia to kick off the Calling All Innovators contest. To encourage designers to create unique apps for sale on the Ovi store, Nokia is offering $4 million in cash and prizes to three winners in seventeen categories of competition. Carrier AT&T (NYSE: T) is putting up the money in co-operation with Nokia. The two phone companies have put up $10 million total towards the event, the addition $6 million going towards promoting the contest.
It’s telling that AT&T is so interested in backing Nokia. It’s expected that AT&T will be losing their exclusive support of Apple’s iPhone within the next twelve months. Considering that 52% of the smartphone market is controlled by Apple’s attractive device, it’s no wonder AT&T is looking to encourage another phone manufacturers product.
Even though Ovi isn’t surrounded by the same levels of buzz as Google and Apple’s respective app stores, it has performed relatively well since it launch in 2008, with around 1.5 million apps downloaded each day. Compared to Apple’s store though, which has seen averaged 8.5 million app downloads over the last two years, the Ovi Store could certainly be performing better. Nokia shareholders should not expect increased app development to turn the company around. Nokia is trading at $10 per share today, down nearly 31% from its 52 week high and no number of interesting apps are going to bring that price up. Investors should instead turn towards the impending release of the N8. If that phone doesn’t succeed in drawing attention away from Apple and Motorola’s products, the Ovi Store will be the last of their concerns.
As of this writing, Anthony Agnello did not own a position in any of the stocks named here.
Hilary Kramer’s 3 Breakout Stocks Under $5. Low prices can mean big profits. New report from Hilary Kramer details her secret to telling a breakout stock from a broken stock. Plus, her Top 3 Breakout Stocks to Buy Now. Get your FREE copy here.
