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MWC Analysis: Is Nokia’s CEO Killing the Company?

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Nokia Windows Phone 7Mobile World Congress, BARCELONA, Spain –¬†Yesterdary Nokia presented its press conference, journalists and fans were expecting a new tablet release by Nokia, but nothing happened and the event was more of the same: “Nokia and Microsoft partnership”.

At the same time, TheStreet.com was announcing that Nokia would receive billions of dollars from the agreement. And now what? Will we prefer those billions of dollars to be received in the short-term or would we prefer to have Symbian and Meego on the top?

Nokia shares falling 4% in the USA pre-market

A huge sell-off is happening since the last Friday when stocks decreased about 14%. Today NOK is losing 4% already as investors are jumping to other tech companies that are following the trend (which is not happening with Nokia as nobody used Windows as OS) by using Google Android as operative system such as Samsung, LG or Sony Ericsson. At the same time investors are losing trust for the CEO, Stephen Elop, as they believe he is a “trojan horse” from Microsoft. But are they making the right decisions?

The “scary people” theory

My advice to those who still hold Nokia stocks is not to follow the trend, at least immediately. How could one think that a CEO running such a huge company as Nokia would prefer to lose his reputation by allowing a great investment from Microsoft? The thing here is that we have a CEO at Nokia who is taking the risk and this can finally work; Elop is the one who is not betting on Android and this can work. Will it really work? That answer cannot be given now, because it can completely fail, or not, and the only thing we know right now is that Nokia and Microsoft are going ahead with the partnership, which is sending shares falling as the Finnish giant kills Symbian and possibly even MeeGo. Overall, the deal is great and shares may recover this week. My position as a trader this week will be to find the bottom on Nokia stocks, today or tomorrow, so that I can release nice profits in the short run.

What about the long-run at Nokia? There was a change in “technology”, but that change isn’t like when we add a new factory to a company; this change is about something risky: it can go greatly or it can be very very bad.

Why could it go well for Nokia?

A simple reason, there are many .Net developers. There are already 8 000 applications for Windows Phone 7.

Why could it go wrong for Nokia?

Smartphone developers are only thinking about Android and Apple apps. Qt is dead and these developers will have to make a choice and they might not be very happy to move to .Net.

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By , Financial Director and Correspondent on Feb 14th, 2011 GMT +2

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