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Nokia debuts $99 smartphone in emerging market struggle

Posted on May 10, 2013, Friday

Chief Executive Officer (CEO) of Nokia Corporation Stephen Elop holds a Nokia Asha 501 mobile phone as he addresses an unveiling ceremony in New Delhi on May 9, 2013. -AFP photo

Struggling Finnish handset giant Nokia unveiled on Thursday its next-generation of lower-end mobile smartphones as it seeks to gain traction in a market expected to be worth $15 billion by 2015.

Nokia chief executive Stephen Elop released the $99 Asha 501 touchscreen Internet-enabled model at a global launch in New Delhi that especially targets emerging market users moving up from their no-frills first mobile phones.

India, the world’s second-largest mobile market after China, “is very important” for Nokia, Elop told reporters, fresh from a bruising meeting in Helsinki earlier this week with shareholders unhappy at Nokia’s poor earnings.

The country of 1.2 billion people, Nokia’s second-biggest market in 2012, is a “bellwether market that is a very leading indicator of some trends”, he said.

The Asha 501 borrows some of its looks from Nokia’s higher specification Windows-based Lumia phone and is aimed at stopping consumers embracing Google’s Android software offered on cheaper handsets made typically in China.

Elop, who took the reins of Nokia three years ago and is facing demands from shareholders to review his controversial move to switch over to Microsoft’s Windows software, declined to comment directly on Nokia’s financial performance.

Nokia, which reported a $355-million first quarter net loss, is struggling to recover ground in the smartphone line after its number of smartphones sold worldwide fell by 49 percent in the first quarter.

Analysts say the once-global leader’s future may lie in selling budget smartphones in emerging markets such as India and Africa where penetration is still relatively low.

But the Finnish company faces stiff competition from Apple and Samsung as well as from Chinese and Taiwanese handset makers.

It is seeking to ramp up its smartphone portfolio in the sub-$100 smart phone market which the company estimates will be worth $15 billion globally by 2015.

The Asha 501 — Asha means “hope” in Hindi — claims to offer 17 hours of talk time and 48 days of standby time. Nokia will start shipping the device to vendors worldwide in June and the phone will be available in 90 countries.

The new phone “raises the bar for what is possible in affordable smartphone design,” Nokia mobile executive vice president Timo Toikkanen said.

The Asha 501 will initially be a 2G phone “as 80 percent of the world operates in 2G environment”, said Elop, but Nokia will widen the range to include 3G phones as well. -AFP

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