Microsoft may have other motivations as well; a smartphone would give Microsoft a “Plan B” in the event that its Windows Phone 8, which powers smartphones from Samsung (SSNLF.PK), Nokia (NYSE:NOK), and HTC (HTCKF.PK), fail to do well. While Nokia’s Windows models are sold out at U.S. retailers, the company’s initial shipment volumes to retailers are still unknown.
When Microsoft’s Chief Executive Steve Ballmer was asked about the company’s smartphone plans by the Journal, his reply was ambiguous. “We’re quite happy this holiday [season] going to market hard with Nokia, Samsung and HTC,” he said. “Whether we had a plan to do something different or we didn’t have a plan I wouldn’t comment in any dimension.”
As for Amazon, Citigroup analyst Kevin Chang stated in a research note from earlier this month that the Internet retailer is set to “launch a smartphone based on QCOM 8960 Pro (better processor than Samsung uses in its LTE Galaxy S3) at below $300 in June 2013.”
CHEAT SHEET Analysis: Is This an Industry Trend?
One of the core components of our CHEAT SHEET Investing Framework explains that companies riding macro trends tend to outperform those that don’t. Think of the investing proverb, “A rising tide raises all boats.” In this case, the trend is obvious; smartphone sales are on the rise and PC sales are on the decline. Yang predicts that smartphone sales will rise to 738 million units this year, up from 481 million last year.
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