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Image Source: Nokia
E62
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22nd September - It's not often that Nokia finds itself
the underdog. But in the business of smartphones - powerful
wireless devices that can handle e-mail and office documents
in a compact package - that's exactly where the world's
largest cell-phone maker stands.
With nearly 50 percent market share, Nokia (Charts)
reigns over smart device sales worldwide. In the United
States, though, it lags behind more entrenched players
like Palm (Charts),Motorola (Charts) and RIM (Charts),
maker of the BlackBerry. Here, Palm's Treo and Research
In Motion's BlackBerry dominate smartphone sales, together
holding more than 70 percent of the market.
With its new E62 smartphone, unveiled at last week's
CTIA IT & Entertainment show in Los Angeles, Nokia
is hoping to change the game with an unbeatable proposition
- price.
A high price has long been the weakness of smartphones.
Early adopters and gadget hounds have been willing to
shell out hundreds of dollars for the latest, most capable
devices. But for the mass market, which is used to heavily
subsidized phones that often come free with service,
paying more than $100 for a cell phone comes as a shock.
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If the much-anticipated E62 lives up to its hype, the phone
could boost Nokia's U.S. market share - and jumpstart the
entire smartphone market.
Nice price
At barely half an inch thick, the E62 - an Americanized version
of Nokia's popular E61 -- features a full QWERTY keypad, 80
megabytes of built-in memory, and support for a variety of
e-mail platforms. But you'll find those features in Treos
and BlackBerrys, too.
So just what does the E62 have that other smartphones don't?
Arguably, its most striking feature is an affordable price
tag: Starting at the end of September, it will be available
for as little as $150 from Cingular, its exclusive U.S. carrier.
RIM's new BlackBerry Pearl sells for $199, while Palm's cheapest
new phones go for $299. (All of these prices require signing
up for some form of service contract.)
Nokia spokesperson Laurie Armstrong says that it's the E62's
features, not its price tag, that are most compelling.
But according to analysts, lower prices are what's needed
to drive rapid uptake in U.S. smartphone sales, which -- despite
accounting for about 20 percent of new cell phone purchases
-- still make up just 3 percent of total mobile phone subscriptions
nationwide.
Of course, Nokia's not the only one pushing sleek phones
at lower price points. Selling for as little as $199, Motorola's
recently launched Q smartphone also attracted customers with
a relatively affordable price tag (not to mention Razr-like
looks).
And Nokia's got plenty of other U.S. competition, affordable
or not, to contend with. RIM's new BlackBerry Pearl is already
earning major cool points for its sleek design. Palm, maker
of the popular Treo smartphone, is set to release an additional
two smart devices in the United States by end of this year.
"Price only opens the door," says Jim Christensen,
director of product communications at Palm. "But if you
take a device home and it doesn't meet your expectations,
it's going right back to the store."
Smart enough?
Indeed, despite Nokia's high hopes (and plenty of rave reviews),
some analysts are skeptical the E62 has what it takes to become
Nokia's "it" device for U.S consumers, and significantly
drive smartphone sales.
"People are always trying to identify the next Razr,
or the next paradigm-shifting device," says Chris Ambrosio,
director of the wireless device strategy service at Strategy
Analytics, a Boston-based research and consulting firm. "The
E62 isn't it, though it is a pretty compelling device and
definitely a step in the right direction for Nokia."
According to Ambrosio, we're still a few years away from
smartphone proliferation, and that's not just due to the high
cost factor of prevailing U.S. smart devices. Here at home,
the mobile market is only about 70 percent saturated, meaning
carriers are still focused on growing subscriber numbers by
offering heavily subsidized basic phones.
In fact, Ambrosio suggests Nokia might have greater success
in developing a U.S. smartphone based on its N-series of multimedia
phones, which focus on digital-camera and video features,
not mobile e-mail.
But to meet its goal of changing the game, all Nokia has
to do is take some U.S. market share from Palm and RIM - and
in a price-sensitive market, where buyers are used to cheap
phones, a $50 discount over the competition may well be enough
to get it there.
source:AME
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