Nokia Oyj unveiled mobile phones at both ends of its range to fend off competition from cheap unbranded handsets and smartphones powered by Google Inc's Android.
The C2-03 model would target consumers in emerging markets by making it easier to switch between different phone numbers, Mary McDowell, the executive vice-president who runs low-end phones, said in Singapore today. Nokia also showed the N9, a touchscreen smartphone, based on its MeeGo software.
“Nokia recognises it needs to move more quickly to make up for lost ground in emerging markets, particularly India, where agile opportunist competitors have taken market share,” said Ben Wood, a London-based analyst with CCS Insight.
Nokia rose as much as 12 cents, or three percent, to euro 4.17 and traded at euro 4.16 as of 11:21 am in Helsinki, valuing the Espoo, Finland-based company at euro 15.6 billion ($22 billion). The stock is down 46 per cent this year.
MARKET SHARE
“The reality is 90 per cent of the world does not have or cannot afford a smartphone or a high-end device,” said Elop in his first major speech in Asia since the former Microsoft Corp executive took over at the helm at Nokia in September last year. “This gap creates an opportunity.” Elop plans to increase investment in low-end phones that have sold well in Asia, as well as emerging-market countries elsewhere. These models accounted for about half of Nokia's handset revenue and 78 per cent of units shipped last year.
They face competition from cheaper Android phones from companies such as ZTE Corp and a flood of unbranded phones from smaller Chinese manufacturers, built on chipsets from MediaTek Inc.
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While China led Nokia's markets in the first quarter with a 30 per cent sales increase, the company, on
May 31, said intensifying competition from local suppliers in the country was driving down prices. China and the Asia-Pacific region accounted for 45 per cent of Nokia's device sales in the first quarter.
That hasn't stopped the slide. Its market share in China tumbled to 20.4 per cent last year from 31.5 per cent in 2009. In India, Nokia dropped to 30.2 per cent from 48.9 per cent in one year, according to estimates at Gartner.
The C2-03 model, a touch-and-type device combining a touchscreen and a keypad, would have the ability to carry two SIM cards, facilitating the use of two phone numbers. It would also feature maps and location-based services, without requiring the user to sign up for a plan with the carrier.
“Touch and type allows them to introduce something at the low end that other guys don't have quite yet,” said Mikko Ervasti, an analyst at Evli Bank in Helsinki. “It will help to get some part of the market in the low end.”
Countries like Indonesia, Vietnam, India, China, Nigeria, South Africa and Brazil are regions that could yield the “next one billion people” who'll buy mobile phones, McDowell said.
'FULL SWING'
“In the third time in a month, we're debuting another dual-SIM device,” McDowell said. “We may be late to this party, but we're in full swing now.”
At the high end, Nokia faces competition from Apple's iPhone and a welter of Android-based devices that are starting to match the iPhone's capabilities in applications, web surfing and media delivery. These touchscreens also integrate increasingly well with corporate e-mail and other systems, making them a threat to Research In Motion Ltd's Blackberry line as well.
The N9 user has no buttons on the face and works by swipe and tap gestures on the screen. The touch interface extends to accessories like headphones and speakers which are activated through tapping them using so-called near field communications technology, said senior vice president Marko Ahtisaari.