Nokia, Microsoft Boosted by Bullish Credit Suisse Report on Windows Phone

Nokia's (NYS: NOK) partnership with Microsoft (NAS: MSFT) to use Windows Phone may begin to pay off this year as operators search for a third operating system to complement Apple's iOS and Google's Android, according to a new report from analysts at Credit Suisse.

"We fundamentally believe that Nokia's focus on Windows will allow the company to drive a recovery through 2012 in both its top line and earnings," Credit Suisse wireless analyst Kulbinder Garcha wrote in a note to clients, according to MarketWatch. Credit Suisse boosted its rating on Nokia's shares to "outperform" from "underperform" and raised its price target.

Of particular interest, Garcha said that research among mobile operators indicates that they want Windows Phone to become the proverbial "third ecosystem" in a market that is increasingly dominated by Apple's and Google. "We found that 85% of carrier respondents believe that there is a need for a third ecosystem, with 77% noting that it will be Windows Phone/Nokia," Garcha wrote. "Our survey also showed that both subsidy and volume share is expected to be markedly higher for Windows Phone over the next 12 months."

Commenting on Nokia's new Lumia 800 smartphone, Garcha said that it offered "sensible and aggressive pricing" at 180 to 300 euros before subsidies. He added, in a report carried by Barron's, that the "quality of the Windows platform is quite good, which, combined with Nokia's brand, distribution, scale, and IPR, should enable it to capture smartphone share."

The Credit Suisse analyst was also positive on the likely growth in sales of Nokia's success with Windows Phone handsets, claiming they would outpace Symbian-based devices by the third quarter of this year.

Separately, Nokia reportedly appears ready to replace outgoing Chairman Jorma Ollila with Risto Siilasmaa. Both Bloomberg and Finnish newspaper Helsingin Sanomat reported last week that Siilasmaa is the top choice for the post. Siilasmaa has been a board member of Nokia since 2008 and is also founder and chairman of F-Secure, a Finnish computer security software company, as well as chairman of Finnish telecoms company Elisa.

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