Nokia and Android? Don't Listen to the Rumors
Market rumors are something with which Fools are familiar, driving short-term stock price movements up or down, depending on the "news." No company is immune, of course. A leaked picture of a new smartphone here or a CEO alluding to a possible sale or strategic alliance there, and before you know it, investors react. Technology seems to be affected by rumors more than most industries. That'll happen when new products and services are introduced almost daily.
For fans of Nokia (NYS: NOK) , the recent news of CEO Stephen Elop stating that he's open to a change in operating systems from Microsoft's (NAS: MSFT) Windows 8 -- the OS to which Elop's essentially hitched Nokia's wagon -- to Google's (NAS: GOOG) Android was a shock, to say the least. Now? Just when things seem to be going so well?
Can't we all just speak English?
Nokia is based in Finland, and Elop is a Canadian citizen. What does that have to with anything, you ask? Turns out, the rumor mill regarding Nokia being open to a Google OS smartphone alternative began in a recent interview Elop had with a Spanish reporter for the El Pais paper. A Finnish company, a Canadian CEO, answering questions in Spain. You can already see where this is going.
When asked by El Pais whether Nokia would make a smartphone running Google's Android, Elop responded, "Today we are engaged and satisfied with Microsoft, but anything is possible," ostensibly leaving the door open for a shift. Or, at least that was how Elop's response was interpreted. Nokia clarified the misconception almost immediately saying , among other things, "We're looking further into the future, but in terms of what we're bringing to market, and what we're immediately focused on, we're focused on Windows Phone."
Unfortunately, Elop's misunderstood quote came on the heels of prior speculation of Nokia's shift to Android based on a job posting a couple of weeks ago. So, rumormongers were already primed for a Nokia/Google tryst, and with Elop's Spanish quote getting lost in translation, the pump was primed.
Why the rumor really made no sense
Naturally Nokia isn't tied to Windows 8 forever, nor should it be; systems and markets change too quickly to suggest otherwise. But Nokia's Lumia smartphone introduction efforts, running Windows 8, are beginning to pick up steam, making it even less likely Elop would choose now to suggest such a dramatic change in direction.
The deal with China Mobile (NYS: CHL) and its 700 million users -- and, better still, its agreement to subsidize the cost of the Chinese-specific Lumia 920T smartphone -- is a huge win and could prove to be a game changer for Nokia.
Its recent agreement to settle the patent litigation with Research In Motion demonstrated the value of Nokia's impressive patent portfolio, estimated at $6 billion and generating over $650 million in revenue annually. Introduction of the Lumia 620 will boost Nokia's share in the profitable, but often neglected, low-end smartphone marketplace.
No, Nokia isn't in the market for the Android OS, nor should it be. Elop's move to fall in with Microsoft, full steam ahead, is working out just fine. Google will just have to wait.
The article Nokia and Android? Don't Listen to the Rumors originally appeared on Fool.com.
Fool contributor Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Google. The Motley Fool owns shares of China Mobile, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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