Nokia unveils two new mid-range cellphones-Asha 308 and Asha 309
two new affordable touch-screen cellphone
models on Tuesday to defend its mass
market position while it struggles to
compete in high-end smartphones.
Basic cellphones have generated most of
Nokia’s sales, holding up much better than
smartphones, where it has rapidly lost share to
rivals like Samsung and Apple.
With a profit margin of over 20 percent, these
phones are still the company’s bread and butter
even though consumers are increasingly
switching over to smartphones.
“Although they don’t get as much attention as
its smartphones, mobile phones play a key part
in Nokia’s future. Mobile phones account for the
majority of Nokia’s revenue today and they are
also vital for building loyalty with potential
smartphone users in the future,” said Ovum
analyst Nick Dillon.
Nokia said on Tuesday it expects the Nokia
Asha 308 and the Nokia Asha 309 to retail for
about $99, excluding taxes and subsidies, with
deliveries to start in the fourth quarter of 2012.
Analysts have said offering phones around or
under $100 is crucial for the company if it wants
to compete with cheaper smartphones using
Google’s Android software.
Nokia still sells almost 1 million basic phones a
day but it has reported operating losses of 3
billion euros ($3.9 billion) in the last 18 months,
all while closing sites and cutting tens of
thousands of jobs.
Analysts say the new phones will buy it time but
that its new Windows smartphones must
succeed to secure its turnaround.
“The new Asha devices are essential to defend
Nokia from a raft of low-cost Android
alternatives,” CCS Insight analyst Geoff Blaber
said.
“The continued strength of the mobile phone
business is testament to Nokia’s scale and
distribution advantages. Defending that
business is critical if Nokia’s smartphone
business is to weather the storm.”
The new phones use Nokia’s low-end Series 40
software platform and hence most analysts do
not count them as smartphones, even though
Nokia itself sells them as smart devices in
emerging markets.
“The smartphone-feature phone distinction is
largely irrelevant in emerging markets. The
Asha devices provide all the features most users
need, including apps, web browsing and
Facebook access,” said Blaber.
Nokia has to use its low-end software for the
new $100 phones as Windows Phone
requirements for hardware are too high for such
cheap phones. Nokia’s cheapest Windows Phone
retails for around $200.
Shares in Nokia were up 1.8 percent at 2.14
euros, outperforming 0.5 percent rise in STOXX
600 European technology index.
Separately on Tuesday, Nokia said it would cut
725 jobs at its South Korean factory as part of
its global cost savings programme unveiled in
June.:
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