Can Tablets Save Nokia?

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Nowadays, if you're a gadget maker, you need a mobile strategy. Smartphones are just one side of the coin, with tablets representing the other half. Finnish giant Nokia (NYS: NOK) is still the top dog in worldwide mobile devices (including feature phones), with nearly 111.7 million units sold in the fourth quarter earning it a 23.4% market share, according to Gartner's most recent figures.

Yet where is its tablet strategy? CEO Stephen Elop has already made it clear that he sees a lot of opportunities in the tablet market. The company hasn't made any official announcements to tip its tablet hand, so we're left to the usual supply-chain rumblings.

Well, according to Digitimes, a Nokia tablet might be just around the corner. Nokia and Microsoft (NAS: MSFT) partnered long ago with Windows Phone, and unsurprisingly Nokia is allegedly looking to introduce a new tablet by year's end that runs Windows 8. Mark your calendar for the fourth quarter as the earliest potential release timeframe.

Nokia is looking at joining the ARM Holdings (NAS: ARMH) camp by tapping Qualcomm (NAS: QCOM) and its dual-core Snapdragons for the horsepower. The tablet is expected to carry a 10-inch screen with production outsourced to Compal Electronics, with the first round of shipments reaching upwards of 200,000 units.

A tablet strategy would just be part of the turnaround that Elop is tasked with, as looking at Nokia's segment data shows primarily various shades of red. Last quarter, smart device units fell 31%, leading to a 38% drop in smart deice revenue. Net sales also plunged 29%, and operating profit was less than a fifth of what it was a year ago.

I think Windows 8 is still set to eat Google (NAS: GOOG) Android's tablet lunch, but that's not a high bar to clear. If Windows 8 can grab a decent chunk of the tablet market, and Nokia can garner a respectable slice of that slice, Nokia may not be doomed after all.

Tablets have started a revolution, and there are plenty of winners. Some of the winners are hard to see because they're buried deep inside the gadgets. Check out this new special free report on "3 Hidden Winners of the iPhone, iPad, and Android Revolution" that names a handful of companies that provide the crucial components that these gadgets rely on. It's free.

At the time this article was published Fool contributorEvan Niuhas sold bullish put spreads on Qualcomm and owns shares of ARM Holdings, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Google, Qualcomm, and Microsoft.Motley Fool newsletter serviceshave recommended buying shares of Microsoft, Nokia, and Google and creating a bull call spread position in Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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