Nokia launches flip phones
Nokia launches flip phones
By Jennifer Tan and Brett Young
SINGAPORE/HELSINKI (Reuters) - World-leading mobile phone maker Nokia has launched five new models, including flip phones that were lacking in its range, and says it is confident it can claw back market share in a booming sector.
The company, which has been losing out to rivals which have designed more advanced phones, showcased its first mass-market flip phones, plus a new handset which it claims is the world's smallest model for fast networks.
"We have now sharpened our product portfolio in key areas, bringing to the market new phones in the mid-range, and adding more clamshells to our offering," Chief Executive Jorma Ollila said in a statement.
The Finnish company, whose brand name and smart designs had given it a commanding lead of more than 35 percent world market share, said in April that it had started to lose out because of a lack of attractive phones in the middle part of its portfolio.
Ollila told journalists at a company event in Helsinki that he would continue to chase a global market share of 40 percent, despite having drifted off to 32 percent in the first quarter.
Market researchers like Gartner say that Nokia's share has dropped even further, to 28.9 percent -- still almost twice as much as nearest rival Motorola of the United States.
Among Nokia's latest models are a 6260 smartphone with a flip that could swivel, and a 6630 third-generation (3G) phone, which Nokia says is the world's smallest camera phone for fast 3G networks, equipped with wireless email, Web browsing, video calling and other smartphone features.
It unveiled more clamshell camera-phones with the 6170, and a cheaper model, the 2650. Its new line-up also includes the 2600, a traditional low-budget phone for first-time customers.
Analysts had blamed the absence of flip phones as one of the main reasons for its falling market share. Nokia's first models will compete with a broader line-up of clamshells from its rivals.
"It's a step in the right direction but still a couple of paces behind the competition," said Gartner analyst Ben Wood.
RIVALS FASTER
"I wasn't that enthusiastic about the new clamshells, even though the 6260 looked okay. I'm not really sure it can match the competition," said Erkki Vesola at Mandatum Stockbrokers.
He expressed concern that Nokia had cut the number of new product launches in 2004 to 35 from 40, while much smaller rivals plan equal or more new products this year.
Other analysts were more upbeat about Nokia's chances.
"The clamshell phones are exactly what's needed so they're filling the right gaps." said Jussi Hyoty, FIM Securities, who rates the shares "neutral". Nokia shares were off two percent at 11.68 euros at 12:45 p.m. on Monday, underperforming a 1.5 percent lower Eurotech index. The stock has lost almost a third of its value since the company said its market share was eroding.
Motorola and third-ranked South Korea's Samsung Electronics Co Ltd boosted their market shares in the first quarter to 16.4 percent and 12.5 percent respectively.
FOCUS ON ASIA
Nokia first showed its new models at a company event in Singapore, underlining its focus on the region. Flip phones are the gold standard in Singapore.
Simon Beresford-Wylie, Nokia senior vice president for Asia-Pacific, said he expected "dynamic" growth in regional mobile subscribers, estimating that by 2007 for every fixed line user there would be more than two mobile phone users.
In the three years to 2007, the number of mobile subscribers globally will have climbed by some 700 million to two billion and Nokia expects about 300 million of the new subscribers to come from growth markets in the Asia-Pacific region.
"Clearly the industry is thriving. Throughout 2004, around 800,000 new subscribers have joined the mobile world every day," said Nokia board member Matti Alahuhta.
Nokia said it expects mobile phone sales for the industry to reach 600 million units this year, up from 520 million in 2003 -- a forecast that is in line with industry estimates. Camera phones are expected to make up one third of total sales.
Nokia officials estimated that more than 60 operators will have launched commercial wideband-CDMA 3G services by the end of 2004, up from a previous estimate of 50, and that currently there are close to six million W-CDMA 3G subscribers worldwide.
Nokia is generating 20 percent of total network sales with 3G systems, Nokia Networks chief Sari Baldauf told Reuters in an interview.
June 14, 2004 at 03:08 PM in Telecommunications | Permalink
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