One wonders.

For those who are unaware, Nokia was for more than a decade the benchmark for cellphone RF performance.  You know, that funny thing you all care about (the ability to pull in and process a signal) but isn't "cool", "pretty", or "rad"?  Yes, that.

I still have a 3395, which was one of the best-performing RF devices ever built.  It could get a good signal lock and hold a call in places where other phones were woefully unable to do so.  I keep it, fully-unlocked along with a 12v car plug, for emergency use because it will talk to towers in places nothing else will, and until GSM is finally turned off to free space for LTE it will continue to set a benchmark for "must hold signal."

Nokia got left by the wayside when the "smartphone revolution" took off.  They had Symbian, but nobody liked it.  Apple and Android trashed their market share to within an inch of their life, despite the firm's superior RF engineering.

But quietly, Nokia and Microsoft have been building something.  Windows 8.  And now, with a launch of both imminent, one is forced to wonder whether the bottom has been hit.

On a fundamental level Nokia looks terrible.  Their revenue is down 20% annualized, they have a -4.5% operating margin at present and their market cap, at $10.2 billion, leaves them selling under book value and at only 1/4 sales.  They have $12 billion in cash on the balance sheet but $6.4 billion in debt, not exactly a great ratio.  And with only $1.2 billion in operating cash flow, that debt number looks pretty big.  While the stock is up big in the last month or so, it's still selling for well under half where it was last October, when it hit $7.38.

So why do I think they might have turned the corner?

One word: Integration.

Microsoft is trying to beat Apple at its own game.  Remember, it has done this before -- with Windows.  The Mac had the first windowed, WYSIWYG operating system.  Windows 3.1 sucked big fat ones, to be polite, and Windows 95 wasn't much better in the reliability department.

But then XP showed up and suddenly the Mac became a conversation piece.  Oh sure, it had niche markets, but the impending take-over by Apple, which had a premium-price strategy then as it does now, was instantly derailed.

Is Surface going to do the same thing?  And more importantly, will Windows 8 make "many devices, one integrated view and data store" a reality for Microsoft?

I don't know.  But at under $3 a ticket and with a near-lock on the phone side of the Windows 8 story, if you think Microsoft is going to pull it off then Nokia is worth a punt -- with money you can afford to lose.

The options are expensive, with implieds over 75% essentially everywhere in the longer-dated play, while the stock itself is priced like an option that doesn't expire, which makes them a poor choice.  The stock itself, on the other hand, doesn't look bad for those who like to be long risk and "rags to riches" stories with a driver (Microsoft) who has done it before.

The downside target is zero, of course; if Microsoft fails to "do it again" and their integrated view does not take off then Nokia has nothing compelling left and probably suffocates under its debt load over time, although they still have a decent market internationally in places where people have little money but still want communication devices.  In the higher-end (and higher-margin) markets, however, which is what they have to regain for this bet to pay off, IMHO the entire wager is on the success of the Win8/Surface/Phone paradigm.

Disclosure: Long for a punt.