A rare look inside Nokia China's test center

Nokia China opened its doors and factory in Beijing early this month to a group of journalists from Southeast Asia.

For the first time in its decade of operations, the company gave its guests a chance to have a close look at and interact with its testing center, design studio and manufacturing process.

That Nokia is a leading company producing quality mobile phones is something just about everybody already knows. But knowledge of the details of just how each Nokia device is made and tested is possibly less widespread.

A brief visit to the company, following a rare invitation to journalists, gave a chance to see a series of its processes, from its stringent testing and creative design to seamless manufacturing.

On arrival at the building compound, the journalists were greeted by Louise Ingram, Nokia's regional head for corporate communications, and David Tang, Nokia China's vice president. Tang eagerly discussed the great achievements his company has made in China.

"Over 180 million Chinese people use Nokia devices every day," Tang said, disclosing the importance of China's position, as it constitutes the largest single country market for Nokia in the world.

Nokia's sales in China last year, for example, reached a value of 6.42 billion euros, accounting for 13 percent of Nokia's global net sales, he said.

In line with Nokia's ever-growing presence in China, Tan described the Finnish mobile phone producer's vision of bringing the Internet to rural areas where the Web is not currently accessible.

Even though made-in-China products still tend to be perceived as being of inferior quality, Tang assured the journalists that this is not true of Nokia China, as the company has adopted the same high-quality standards practiced by Nokia factories all over the world.

The first impression on entering the Nokia China Campus, which is located in Xingwang Industrial Park in the Beijing Economic and Technology Zone, is that it places a strong emphasis on providing a pleasant working environment for its employees.

Designed with large open spaces and bright interiors encircled by glass windows, the building is equipped with various facilities, including a business center, modern gym, massage parlor, ATMs, cafeteria and restaurants.

Combined with a wide range of entertainment areas, the pleasant and functional working environment is expected to enable employees to work to full capacity, thereby making them productive and able to create products of excellent quality.

As well as holding the testing center, design studio and factory, the campus also houses the company's China headquarters.

The highlight of the visit was to the tightly guarded test center, where the journalists were guided through several rooms where key tests are carried out on the phones.

The test center in China constitutes one of 10 test centers operated by Nokia around the world.

All claim to be operated under the same rigorous quality control standards.

This is where you discover answers to those things you're curious about when it comes to how the company considers any mishaps befalling their mobile phones.

For example, what happens if a handset is kept in the pocket of a pair of jeans for a long time? How about if you drop it onto the pavement? What if it is exposed to moisture? Or comes into contact with a chemical substance?

As Kenneth Hans, manager of the test center, said, "A Nokia phone is put through over 200 rigorous tests before it goes to the market."

The range of tests involves testing responses to being dropped, scratched or exposed to extreme temperatures.

Tests are developed and conducted to resemble real-life situations. Durability tests, for example, include measuring the device's resilience when dropped from a certain height - a shirt pocket - onto a concrete surface.

It even has a machine that simulates what happens to a handset carried in pockets to clothes: When the device is carried in a back pocket, it may bend when the user sits down. One machine is used to simulate the effects of the bend and twist that the device experiences. Another uses real denim to simulate turbulence inside the pockets.

Other tests involve assessing the durability of a handset's keypad by pressing the keypad repeatedly to ensure it keeps working; another tests the flipping mechanism for phones with hinges to ensure that the handset maintains its mechanical and electrical functionality.

To help protect handsets against the elements, weather conditions are also simulated to test the device's resistance to extreme temperatures and high humidity.

The design studio revealed fewer secrets, not offering much in the way of visuals or data, except to show the place where creative minds gather to think up devices that can be both aesthetically and functionally pleasing to users.

The team of 25 designers tap their creativity in comfortable, neatly arranged compartments, each with a set of desks and computers.

Also in the studio is a library holding design books along with a glass case displaying nearly every product Nokia has ever released, even those bricks in the old 3210 and 5110 series.

The designers use an acrylic wall to illustrate any ideas derived through brainstorming activities.

The last stop on the visit was to the manufacturing center and assembly lines, which took up at least two floors. As it adopts the same standards applied in Finland and other parts of the world, the factory is clearly clean and well maintained.

The factory operation is made possible through the support of Nokia's partners, most of which are big-name industry players such as DHL of the US, which deals with supply logistics, Sanyo of Japan, which supplies batteries, and Friwo of Germany, with its chargers. They are among the 20 partners of Nokia China housed in the Xingwang Industrial Park.

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Nokia Buys Assets of Social Startup Cellity

Nokia has agreed to acquire certain assets of Cellity, a 14-person German startup with a mobile social-networking service that will now be shut down at the end of September.Cellity's service, which has only been available in beta testing, gives users a place to store all their contacts and then access them on their mobile phones or the Web. The service can also display contacts' latest updates to social-networking sites such as Twitter, according to the company's Web site.

But Nokia said it won't operate the Cellity service after the acquisition, which it expects to complete in the third quarter. Instead, it is acquiring the Cellity team in order to strengthen its social-networking capabilities and will discontinue the company's current offering. In an entry on Cellity's corporate blog, the company said its service will not be available after Sept. 30.

Nokia, the world's largest cell-phone maker, recently has been bolstering its services and software offerings to differentiate its devices and compete with Apple's iPhone. Its Ovi Share service lets Nokia users share content on their phones and the Web, and Nokia has also introduced an Ovi Store that sells mobile applications.

The company said it hopes to accelerate its services development through the acquisition. The Cellity team will become part of Nokia's services unit. The companies did not disclose terms of the deal.

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Nokia Surge (AT&T)

The world's number-one mobile phone maker, Nokia, mostly sells low-end phones here in the U.S. That could change with smartphones like the excellent Nokia E71x and the new Nokia Surge, two subsidized handsets for AT&T that bring Symbian smartphone power to the masses at a low price. Unfortunately, the Surge suffers from an identity crisis in AT&T's lineup—it's tough to see whom exactly this phone is for. The Surge is targeted at a younger demographic, with its slide-out QWERTY keyboard and emphasis on messaging. So it's a bit like a texting phone. But AT&T requires an expensive smartphone service plan for the Surge, and underneath the youthful design lies a full-fledged document editing, GPS, and e-mail powerhouse.

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Nokia Calling

Cast your mind back for a second to 2005, when the forecast for Nokia was as sunny and clear as an endless Finnish summer day. The world's biggest cell-phone maker had just launched the Nseries, a clever new range which packed a Web browser, video, music and pictures into a single phone. The devices moved Nokia a generation ahead in the race to build the first real smart phone, and were selling out from Dubai to Denmark. Then came a product called the iPhone. With its clever touchscreen and snazzy software and services, Apple's phone — launched in 2007 and dismissed privately by Nokia execs unimpressed with its engineering — won rave reviews, millions of customers and, crucially, a rep for cool. Today, Nokia still sells at least a dozen times more phones than upstarts like Apple or Ontario-based Research In Motion (RIM), which makes the BlackBerry. But the firm remains lengths behind in the image stakes, and has struggled to get its smart phones to stand out. "You know who are the winners when you have huge innovation," says Pierre Ferragu, a London-based analyst at investment research firm Sanford C. Bernstein. "It's anybody but Nokia. [The company] is just unable to do it."

That's a reputation Nokia has battled of late. The company, based in Espoo, Finland's second city, began life 144 years ago making paper and now ships roughly four in every 10 cell phones sold globally. But despite its huge size, and an image that 15 years ago was the epitome of a clever sort of Scando-hip, Nokia products have in the past decade seemed off the pace. The company trailed in the scramble to produce clamshell phones earlier this decade; when the market moved on to razor-thin handsets, it lagged again. With smart phones, Nokia actually offered a touchscreen well ahead of the iPhone, only to watch as Apple enhanced the feature and packaged and marketed it more smartly. (See iPhone Apps for New Moms.)

Nokia's momentum has stalled. According to Boston-based tech consultants Strategy Analytics, its share of the global smart-phone segment has dropped from 49% in 2007 to 37% in the first quarter of 2009. RIM, meantime, has boosted its share from 10% to 20% over the same period, while Apple's share has more than tripled to 10%. Throw in the global recession, which has users holding on to their handsets for longer than usual, and it's little wonder that Nokia's second-quarter results, announced last week, showed profits down 66% to $536 million. With investors spooked, and Nokia itself warning that global cell-phone sales will drop by 10% this year, the firm's shares are down by a fifth in 2009. (Read "Nokia's Application Store Faces Apple Dominance.")

Nokia's answer to all this bad reception is to concentrate on what it's best at. The company remains confident it can sell high-end smart phones. But competition from the iPhone, BlackBerry and rival handsets from the likes of Taiwan's HTC could limit Nokia's slice of the high-end market to 15%, according to analysts at Sanford C. Bernstein. With 40 million potential users for those devices, that's no small loss.

But even if Nokia does miss out on the high-end market, it has a huge opportunity in taking smart phones to the hundreds of millions of middle-income consumers who want a fancy device but don't want to pay too much. At the moment, smart phones account for just one in every seven mobile devices sold. But the segment has doubled its share of the global cell-phone business over the past three years, and with users craving the added features they offer, smart-phone revenues should roughly double to half the industry total by 2014, according to Kulbinder Garcha, an analyst at Credit Suisse in London.

To grow the number of smart-phone users, manufacturers will have to squeeze the price of each unit they sell. Doing that, especially in key emerging markets such as Asia and Latin America, will require both scale and extensive distribution networks — and on both measures nobody beats the Finns. There's "a major opportunity for Nokia to … deliver mid-range smart phones to the masses," analysts at HSBC wrote in a recent advisory. The middle-income market, they said, was right in Nokia's "sweet spot."

The rewards are likely to be considerable. For devices with many of the features of more expensive products but priced from around $300, the potential market grows to some 400 million users. As many as two-thirds of those consumers are likely to be in emerging markets.

Which is exactly why Nokia is releasing phones like the 5800 XpressMusic and the E63. Designed with both developed and emerging markets in mind, the 5800 looks a bit like an iPhone. It's not as clever as Apple's gadget, but it has a neat touchscreen, plays music and videos, and — at under $400 — retails for roughly 25% less than a 3G Apple. For $280, meanwhile, the sleek E63 messenger phone packs all the basic features of a BlackBerry Bold at just 50% of the price, according to Bernstein's Ferragu. Nokia has shipped almost 7 million of the 5800 devices since they were launched last November. The firm won't reveal figures for the E63 but Shiv Shivakumar, managing director of Nokia in India, says the device "is our way of democratizing the QWERTY keypad and the whole concept of messaging to the Indian market." In the West "people have gone from the PC to the converged device," he says. "In India, people will skip the PC and go straight for the converged device."

Much of Nokia's emerging market dominance boils down to cost management — a crucial advantage when it comes to selling smart phones to price-sensitive consumers in India and elsewhere. Nokia will likely ship more devices worldwide this year than the next three biggest cell-phone makers — Korean rivals Samsung and LG, and London-based Sony Ericsson — combined. Manufacturing on that scale brings enormous purchasing power, making it possible to squeeze the cost of everything from memory chips to plastic casings.

Nokia is also typically more efficient when it comes to how it builds a phone. While an iPhone requires around 1,000 components, Garcha says Nokia's 5800 needs only half that number. "Having an extra 10 or 20 dollars on your bill of materials doesn't matter when you're selling your phone at $600," he says. "Think about making it a smart phone at $100 a few years from now: $20 of cost is 20 percentage points of margin. It actually becomes very important."

But Nokia's real genius is simply in selling phones in more places than any of its competitors. From Indian mountain villages to towns on the dry plains of northern Nigeria, Nokia is everywhere. Supplying the end user with a smart phone in Western Europe and America is typically the job of cell-phone operators who will even subsidize the cost of a device in return for tying a buyer to a monthly plan. Not so in emerging markets, where users typically buy their phone independently. That means manufacturers need their own "very efficient distribution," says Sanford C. Bernstein's Ferragu. "And on distribution, nobody comes close to the strength of Nokia."

Consider India. Years of building its business in the country — the first ever cell-phone call in India in 1995 was carried over a Nokia phone and Nokia-deployed network — has established the company as India's biggest supplier by a huge margin. Nokia devices are sold in 162,000 retailers in India, more than three times the number for rivals Samsung or LG. Although Samsung is investing heavily to catch up, Nokia claims roughly 60% of the Indian market. So ubiquitous are the firm's products that many locals refer to their mobile phone as a "Nokia" even when it isn't. In China, Nokia supplies around 30,000 retailers, far more than its rivals. Across the Middle East and Africa, it has another 120,000 outlets and enjoys a 52% share. (Nokia's slice of the North American market is approximately 10%; in Europe it's more than 40%.)

That kind of presence in emerging markets helps explain why Nokia is blurring the boundary between smart phones and cheaper handsets, and trying to entice customers to trade up. In recent months, the firm has unveiled a slew of devices aimed at developing markets, some costing as little as $60. That might seem a lot to pay for someone earning a few hundred dollars a month, but for many people in places where access to electricity is hit-and-miss at best, a good phone can double as a computer, an MP3 device or even a video player.

Take, for example, Nokia's new 2730 model, which will be available later this year for just over $110. The 3G device might not have a touchscreen or a swish keyboard, but with access to Ovi Mail, Nokia's free e-mail service, it's designed to give thousands of consumers in emerging markets their "first Internet experience," says Credit Suisse's Garcha. Ovi Mail was conceived specifically for consumers with limited PC access, and almost all the 350,000 accounts registered since the service's launch last December have been created on Nokia phones, not on computers. To the company, that bodes well for the future. "We believe giving [consumers] this first digital identity will be a way of getting [them] later on into all sorts of other Internet services," says Alex Lambeek, Nokia's vice president for entry devices. "There's a longer-term thinking behind this."

That outlook no doubt includes extending smart-phone services beyond major urban areas. In rural India, where Nokia controls around four-fifths of the mobile-phone market, according to Bernstein research, locals may not be quite ready for smart phones yet — but they will be. At the Mobile and More outlet in the city of Gwalior in central India, co-owner Gaurav Kukreja's best seller is a no-frills 2G Nokia. But, Kukreja says, "younger people from villages often go to cities to study. They come back well-versed with new technology, and with aspirations. They want the latest ... Its time will come." Nokia execs must hope the same applies to them.

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Nokia packs a full smartphone into a compact, unusual-looking QWERTY slider. Is this AT&T's surprise messaging hit? Find out in our Nokia Surge review.

The Nokia Surge is something of an ugly duckling among the inexpensive, full-QWERTY messaging phone set. Actually, it's not even that ugly, and with its Symbian S60 smartphone OS, it's definitely more swan than duck. If you skip the junk that AT&T has piled onto this phone, you're left with a powerful device with business-class e-mail, contacts and calendar sync, a respectable, full-HTML Web browser and suite of multimedia options that were capable of handling our basic music and video needs. We loved the keyboard. It's our new favorite among compact messaging phones, and even though the aging Symbian interface doesn't compare to new-fangled, top-of-the-line smartphones, it still outclasses other, simpler messaging devices by a mile. We wish the phone had more built-in options for our favorite messaging addictions, like Facebook, MySpace and Twitter, but that Symbian S60 OS means an intrepid user will find third-party options available. In the end, some messaging fans might prefer a friendlier QWERTY feature phone like the LG enV3 on Verizon Wireless or the LG Lotus on Sprint, but the Nokia Surge is the best compact messaging phone on AT&T's lineup, and a solid choice all around. Release: July 2009. Price: $80.

Pros: Great keyboard. Full smartphone OS in a small package. Nice Web browser, especially for a compact device.

Cons: Aging Symbian OS not as friendly as other smartphones, or simpler feature phones. Lacks advanced IM and SMS options

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Nokia Phones to Aid Against Malaria Deaths

This weekend millions of North American children diligently completed their homework, did their chores and stayed on their best behavior in the hopes that they'd attend Harry Potter and the Halfblood Prince in theaters. Meanwhile, half way around the world, thousands of children work for the magical protections of mosquito nets and running water. Their Voldemort is malaria. Between 1-3 million malaria deaths happen every year with the majority of the victims being young children in Sub-Saharan Africa. Nevertheless, thanks to the work of a Berkeley research team, help may be on its way.

In so many malaria-endemic countries, the lack of health personnel, equipment and accessible hospitals are a major barrier in ensuring timely diagnosis. But Daniel Fletcher and his team at the University of California in Berkeley have modified a Nokia N73 phone in the hopes that it will alleviate resource issues and aid in early detection of malaria.
With the N73 as the kernel, the team added a battery-powered LED lamp and a series of filters. The result is an extremely inexpensive portable microscope with the potential to detect malaria, sickle-cell anemia and tuberculosis from fluid smears.
Microscopy-based detection of malaria is possible by taking a pinprick from a patient, smearing their blood onto a treated glass slide, and examining it under a microscope. Malaria parasites are detectable when they react to the treatment on the glass (Giemsa stain). According to a New Scientist article published this morning, the modified phone or "CellScope" makes it possible for field doctors to test for the disease as well as send their images to labs via a wireless network.

cell images are coupled with patient details and locations, the CellScope can help reduce disease-based death rates by guiding grassroots health workers in deploying resources, treating those affected and stopping the spread of disease across townships.


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Nokia N97, iPhone, and Modu Go Head to Head

A lot going on in the mobile industry in the last few days and Israel is in the hot spot (no pun intended). Let’s start with the fact that all 3 cellular providers; Orange, Cellcom, and Pelephone recently announced that they will be launching the iPhone 3Gs over the next few months. The word on the street, and when I say street, I mean Twittersphere of course, is that at least two of the three providers bought 100 thousand iPhones from Apple. Now you have to understand that fact in the context that these providers max out at 150 thousand mobile devices sold annually! So out of the 150 thousand phones they will sell in 2009, 100 thousand will be iPhones?! I think it is safe to say we are going to be seeing some serious hard selling of the iPhone, not to mention Capitalism at its best!

Another scoop I learned from Twitter is that supposedly Apple gave many conditions before agreeing to sell the iPhone in Israel. To just name a few, the iPhone ads need to be iPhone ads, no Cellcom ads or Orange ads, but ads made by Apple. This is good news for the average Israeli since most commercials here needs improvement to say the least! Another prerequisite was that the iPhone cannot exceed a certain price! From what I have heard, Apple put a cap on the price of the iPhone, another fact that will of course make a lot of Israelis happy. If you look at the markup of other phones, you will understand why. The bottom line is that the iPhone will be available on every street corner, will be advertised using every form of media, and will be offered at a minimal price.
If all the above conditions are in fact true, Apple’s competition has a challenging few months ahead of them, which brings me to my next point. Nokia is launching the N97 in Israel over the next few weeks. Now, putting all the initial and generally negative reviews aside, the N97 is an impressive device. A 3.5″ touch screen, full QWERTY physical keyboard, a whopping 32GB of storage with the ability to add 16 more GBs with a Micro SD card, HSDPA, Wifi, GPS, and a 5 mp Auto Focus camera. What else can one ask for in a phone?
The thing is, in this industry, it is all about timing, and Nokia Israel does NOT have timing on their side. With the iPhone launching, there will be many consumers that will refuse to pay such a premium price for the N97, when they know that the iPhone, which has a screen that actually responds (Sorry, I just could not help myself), almost all the features of the N97, and Apple’s revolutionary interface, will be available for significantly less, even if the camera is not 5 mp.
Nokia has to be creative here if they want the N97 to become the next E71, which was extremely successful around here. I have to say that, putting my personal feelings aside (keep reading, you will understand), Nokia is on the right track. They just started a very smart and innovative campaign for the N97. Basically, they have a list of bloggers and they go from one to another with a package, while streaming it live on the Web. Each one opens the package with the hope that it will contain a brand new N97. If it does, the blogger gets to keep it, if not, he/she gets to decide who gets the package next. Of course, every blogger along the way blogs/tweets about this interesting contest and creates more hype surrounding the N97. Now, although I was not on the list (hence the personal feeling comment earlier), there is no denying that Nokia did a brilliant thing here. They targeted their ideal audience, the exact people who would even consider purchasing an N97, and they did it without writing one press release or launching one expensive TV campaign.
So far we got two major players competing for the same people, Apple and Nokia. As if that was not enough to cause complete chaos in the cellular scene here, add another variable to that equation. Remember that company that once claimed they are the next big thing in the mobile world? They were designing modular devices? Sound familiar? Well Modu is launching! They are launching this week and they are doing it in…you guessed it, Israel.
Now, I really do hope they succeed as a company, but I have to say, when I heard about it, what feels like a lifetime ago, I thought it was a cool idea with potential, but now, I have to admit, I do not see what need there is in the market for such a device. The basic principle is that the Modu is a tiny and basic mobile device, which can be inserted in different “jackets” that take on various forms and functions. So if you are at work and need a QWERTY, put the QWERTY jacket on. If you are going out with the guys and want a cool looking touch screen, simply put the touch screen jacket on (I am pretty sure they have not released the touch screen jackets yet). It is a cool idea but in today’s market, the people that want a QWERTY have a Blackberry, the people that want a touch screen have an iPhone. Not sure this idea will fly anymore. Even if it does have potential to take off, with buzz words like iPhone and N97 in the air, I am pretty sure now is NOT the ideal time for Modu to launch and Israel might not be the ideal place.
I don’t think there is any doubt who will prevail in this upcoming battle. Apple has successfully created so much hype surrounding its iPhone ecosystem, that when the iPhone finally does launch here, Israelis of all ages will be running to buy them. If the amount of Facebook groups appealing to Apple to bring their device to Israel or the amount of Israelis who already have iPhones they bought, jailbroke, and unlocked are any indication, the iPhone is on its way to a major success in Israel.
I am pretty sure the N97 will also see a relative success, after all if the providers reach their goal and sell 100 thousand iPhones, they still need to sell 50 thousand more devices, the N97 can comfortably fit into that category.
As for Modu, as much as I personally wish them success, I am very skeptical. As Dov Moran, the name behind Modu said, they had so many obstacles along the way, whether it be the developer of the Modu interface going bankrupt or the worldwide recession, someone apparently does not want them to succeed. In my opinion, their initial statements about how amazing their product is and how it will revolutionize the mobile world did them no good either.
However, given all the obstacles Modu met  along the way, there is no doubt that a failed launch can be a very detrimental thing for a company and as much as all the above factors might have damaged Modu, the two words that will pose the most serious threat to Modu’s success are Apple and Nokia.
-Hillel

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The trouble with Nokia's iPhone killer

No. 1 handset maker unveils (sorta) its iTunes and App Store killer to little fanfare.
By Anu Partanen, contributor
Finally, it is here! Nokia’s Ovi store, the cellphone giant’s answer to Apple's iTunes and App Store, and a central piece of the company’s new strategy. Well, actually, it has been here for a couple of months already, but who knew?
If you have not heard of Ovi, no one will blame you. Nokia (NOK), the Espoo, Finland-based handset manufacturer, has chosen a peculiar strategy for launching its new online storefront. The strategy being – no launch.
In short Ovi – “door” in company’s native Finnish – is a portal where Nokia phone users can access, store and share pictures, videos, music, maps, games, contacts, calendars, files and more. The online store is only one part of the service, a place where users can download free and paid content onto their devices. The service can be accessed both through a computer and a mobile device.
The vision of Ovi is ambitious. Nokia is taking on not only other device manufacturers such as Samsung and LG, or smartphone royalty such as Apple (AAPL) and Research in Motion (RIMM),  but social networking sites like Facebook and Twitter, too. The website has been running for couple of years already, and the store has been open for business since May.
All the more surprising, then, that at least in the U.S. nobody seems to know the service exists.
The launch of Apple's App Store for iPhone a year ago breathed new life into the mobile application business, and companies such as RIM, maker of the BlackBerry and Palm (PALM), maker of the new Palm Pre, have responded with widely promoted applications stories for their devices.
Nokia, however, seems to have hardly made a peep for its store. There have been no ad campaigns, no press releases boasting the number of downloads.
“We’re growing this in an organic way,” says Marco Argenti, vice president of media and games at Nokia.
The company will direct bookmarks on its devices towards the store, Argenti says, and markets it online, for example through sponsored Google links. Eventually the store will be one of the key selling points in marketing of new devices.
The European marketing of Nokia’s new Internet flagship device, N97, is already leveraging the store. According to Argenti, there is a new way of thinking behind all this.
“We’re philosophically more in a software and Internet mentality, where you don’t almost even have the concept of a release. Ovi is a service, not a product. We keep adding content to it and improving it every day.”
Improving it needs. The Ovi site has been plagued by technical problems, with the servers crashing on the first day of business and users facing frustrating malfunctions ever since. The number of apps on offer is still significantly smaller than the volume available in Apple’s store.
Nokia says the reason for the troubles is the complexity of its operations. Ovi store has registered users in 180 countries, works in five languages and runs on more than 75 different devices, which use 4 different operating systems. 27 operators in 9 countries offer the possibility of mobile billing.
At launch Nokia estimated that 50 million devices could access the store, and its hope is that in the end every Nokia device (from low- to high-end) will have a button pointing to Ovi.
Analysts have sympathy for Nokia.
”It is always more challenging for Nokia to launch a service of this size than it is for any of the other handset manufacturers,” notes wireless analyst Julie Ask from Forrester Research. “The number of devices and platforms they are trying to operate the Ovi Store on is broader than it is for Apple, or Blackberry. It is not an apples to apples comparison.”
Another aspect of Nokia’s vision adds even more complexity to the equation: localization. The Ovi Store recognizes where the user is located, which language they speak, and how they have behaved in the store in the past. It then recommends content and applications accordingly. Users are also invited to review and recommend content, bringing the idea of social networking to the world of apps.
“I think Nokia has a great concept that is more advanced than Apple’s App Store,” estimates senior analyst Tina Teng from iSuppli. “Nokia has really recognized the possibilities of wireless social networking and the mobile lifestyle.”
In the U.S., however, solving technical problems is not going to be enough to get Nokia’s vision going. Arguably an even bigger problem arises from the company’s battle with the carriers.
Nokia has always been reluctant to modify its devices according to carrier wishes, preferring to sell devices separately from the service. The strategy works in Europe, but in the U.S. carriers want to control the devices in order to offer them to their customers subsidized.
As the result of these conflicting approaches, in the U.S. Nokia’s phones have been expensive and hard to get. If for example, one wants to by the new N97 smartphone in the U.S., just about the only options are to shop online or to go to one of the two Nokia flagship stores. The phone costs currently $599, compared to, say, a carrier subsidized $99 iPhone3G.
The implications of all this to the Ovi Store are dire: if users don’t have the phones, there’s not much point in marketing content for them.
So far none of the U.S. carriers support the Ovi Store software on their devices, and the analysts say the operators view parts of Nokia’s vision as direct competition.
“Nokia is trying to create a portal where all billing and services go through that channel, at the same time when operators are trying to maintain direct billing through themselves,” says senior research analyst Ryan Reith from research outfit IDC.
Unlike many of the other handset manufacturers, Nokia has invested heavily on its own services, such as maps and navigation, which also puts it in direct competition with the carriers.
“It’s a difficult approach, but I think if there’s anyone out there that can take that approach, it’s Nokia, because of their global dominance,” notes Reith.
Some signs of happier times have surfaced lately. Nokia’s second carrier supported smartphone hit the U.S. market in May, when AT&T launched the E71x. July 19 marked the launch of AT&T’s third Nokia smartphone, one called Nokia Surge, designed especially for social networking. AT&T has also said that it plans to offer the Ovi Store on their devices some time in the future, but so far the company has declined to say exactly when this will happen.
These are however but small steps in an uphill battle. According to Nokia’s second quarter earnings released last week, their sales in North America dropped 6% from the previous quarter and 29% from a year ago. According to IDC, Nokia’s share of the total U.S. handset market has fallen in the past three years from almost 20% to less than 8%.
Luckily for Nokia, North America is only a small part of their business. The company  holds 38% of the total global handset market, and 40% of the smartphone market. With big size come perks: if one market is not working, you can always play on others.

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Nokia's new unlocked business slider is sleek and stylish like the Nokia E71, but hides the QWERTY in a narrower package. Check out our Nokia E75 review.

The Nokia E75 is more than a slider version of the Nokia E71 (or Nokia E71x on AT&T). Many of the problems we had with the latter phone have been worked out, leaving us with a more polished and pleasant device. In fact, the Nokia E75 is our new favorite among Nokia's Eseries business phones, and it's one of the best business-focused phones on the market. For features and productivity software, the E75 can't be beat, with advanced Office editing tools that beat similar Windows Mobile devices, and a better Web browser, camera and multimedia kit than most BlackBerry phones. The design is slim and solid, and we think it will appeal to buyers who don't want an obtrusive QWERTY slab up front, but would rather have a stylish phone with a hidden, sliding keyboard. Plus, the keyboard itself is wide and comfortable to use. The aging Symbian S60 interface drags the phone down a bit, and some of the signature features, like the Business / Personal switch, didn't live up to our expectations. Still, we think this phone should have appeal beyond the unlocked market, and serious business users tired of the same old touchscreen tablet or QWERTY slab would do well to give this phone a look. Release: May 2009. Price: $380.

Pros: Sleek, slim design with a full QWERTY keyboard and solid materials. Loaded with great features for business and personal use.

Cons: Symbian OS is ugly and not intuitive. Interface in every app could use polish and modern look. Camera lags behind better Nokia phones.

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Nokia Could Increase Sales With Palm, Kaufman Says (Update2)

July 20 (Bloomberg) -- Nokia Oyj could increase sales of Web-equipped phones with an acquisition of Palm Inc., according to Kaufman Bros. analyst Shaw Wu, who said the transaction would make “strategic sense.”

Buying Palm, which introduced the Pre touch-screen phone last month, would provide Nokia, the world’s largest mobile- phone maker, with the new WebOS operating system. WebOS lets users run multiple applications at once, the San Francisco-based analyst said today in a report.

Nokia, based in Espoo, Finland, fell the most in more than five years July 16 in Helsinki trading after lowering its forecast for market share. Nokia’s market share in the so-called smart-phone market fell to 41 percent by the end of last quarter from 62 percent in 2005, hurt by competition from Apple Inc. and Research In Motion Ltd.

Nokia spokesman James Etheridge declined to comment. Palm representatives didn’t return a voice-mail message seeking comment.

Wu advises investors to hang on to Palm shares. Palm, based in Sunnyvale, California, fell 20 cents to $15.18 at 4:01 p.m. New York time in Nasdaq Stock Market trading. Nokia dropped 9 cents to 9.27 euros in Helsinki.

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Verizon to launch Nokia Twist 7705, LG Chocolate Touch VX8575 and more

Verizon Wireless, North America’s largest mobile carrier, is obviously getting ready to launch many new phones this year, and we’ve got the names of about 14 of them (some already in the rumors, others completely unknown).

First of all, there’s the LG Chocolate Touch VX8575, a full-touchscreen phone that should come as Verizon’s fourth Chocolate handset – after VX8500, VX8550 and the VX8560. It’s not clear yet if the Chocolate Touch VX8575 is the LG BL40, the LG BL42, or another unannounced phone.

Next, we have two Nokia handsets: Nokia Shade 2705 (an entry-level phone to succeed the Mirage 2605) and Nokia Twist 7705, rumored to be a phone with a swiveling display.

BlackBerry Storm 2 9550 is obviously on the “coming soon” list too – it should be launched in October or November.

Samsung Rogue U960, aka Samsung Glyde 2 (pictured below) is prepared by Verizon for an August release.

As we’ve guessed earlier today, the Samsung i920 will be Verizon’s Omnia II – it is probably not the Omnia II announced by Samsung for Europe and Asia, since they have different model names (i920 vs. i8000). Anyway, Verizon’s new Samsung Omnia II i920 might be launched in time for Christmas.

Samsung U450 and Strut U440 should complete the Samsung line-up.

There’s a Motorola phone too – Motorola Entice aka Harmony W766. It will replace the W755, but it’s not clear yet when.

Four push-to-talk phones are also coming soon from Verizon:

• Casio Rock C731
• Casio Brigade C741
• Motorola V860
• Samsung Convoy U640

Interestingly, it looks like Verizon will also launch the Palm Treo 800w, a rather old smartphone that’s available via Sprint since last year. Verizon may introduce the Treo 800w in February 2010.

Via Phone Arena

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Nokia N86 Zooms In on US

Nokia's N86 8MP is destined for American shores in the next few weeks, joining a small handful of new cellphones that emphasize sophisticated cameras rather than the grainy snapshot makers often found on other handsets. However, will subsidy-spoiled American buyers snap up a cellphone that costs over $550?

Well after launching its latest 8-megapixel smartphone camera elsewhere in the world, Nokia (NYSE: NOK) on Monday announced plans to sell the device in the U.S.

The Nokia N86 will be available at Nokia stores as well as online.

Its price tag: US$558, well over twice as much as similar phones from Samsung and Sony Ericsson, when purchased along with a two-year agreement with a mobile carrier.

The device is already shipping in Europe, the Middle East, Africa and China, but will it sell in a country where customers are used to low device prices and longterm service commitments?

About the N86 8MP

The N86 has an eight-megapixel camera, a dual LED flash; Carl Zeiss optics and a Tessar lens.

It has a 2.6-inch AMOLED screen. AMOLED, or active-matrix organic light emitting diode, is an emerging technology for use in mobile devices and is already being used by other makers.

Users can share images and video through the preinstalled Share Online client. Share Online integrates with Nokia's Ovi Share and other media sharing services. It lets users share video and images directly with contacts in their address books.

Other preinstalled Ovi services include Ovi Maps, N-Gage and Ovi Files.

The N86 8MP measures about 0.34 by about 0.17 by about 0.05 inches and weighs just over five ounces.

Technical Details

Nokia's forums describe the N86 8MP as a two-way slide dual-mode mobile computer.

The N86 slider phone is a 3.5G device that supports W-CDMA/HSDPA, EGSM, and WLAN.

The device uses the Symbian OS v9.3 operating system. It has 8 GB of internal flash memory, up to 74 MB of internal dynamic memory, and supports microSD cards of up to 16 GB capacity.

The N86 8MP has a GPS receiver, which is pretty much standard for all new smartphones nowadays.

A Close-Up

The N86 8MP supports MPEG-4; AVC; WMV; 3GPP; RealVideo and Flash video formats.

It can capture videos in MPEG-4 VGA (640 x 480 pixel) resolution at speeds of up to 30 frames per second.

It has an F2 4/3.2/4.8 aperture with automatic aperture control and a mechanical shutter with speeds of up to 1/1,000 second. Focal length is 4.61mm.

The N86 has talk time of up to 3.9 hours for 3G networks and 6.3 hours on GMS networks, according to Nokia.

Standby time is up to 11.5 days on 3G networks and 13 days on GSM networks.

It can support a video call of up to 2.5 hours and offers up to seven hours of video playback at QVGA resolution and 30 frames per second.

Music playback in offline mode is 25 hours.

The device comes with TV-out support for both PAL and NTSC formats, and it supports Bluetooth 2.0.

Camera Phone With a Capital 'C'

Nokia will only say the device will be available in the U.S. in the next few weeks, and company spokesperson Anna Martin declined to be more specific.

When it does turn up on U.S. shores, the Nokia N86 8MP will already face competing devices that also emphasize sophisticated cameras. There are already at least two 8-megapixel camera phones on the American market.

One is the 8-megapixel Samsung Memoir, which T-Mobile began offering in February. The other is the 8.1-megapixel Sony Ericsson C905a Cyber-shot camera phone, which AT&T (NYSE: T) unveiled last week.

Both have many features comparable to the N86 8MP overall and can be purchased for less upfront cash. The Memoir is offered at $199.99 with a two-year service agreement, and the Sony Ericsson C905a at $179.99 after an agreement and a rebate.

Say How Much?

The N86 may be sold unlocked -- Nokia's announcement mentioned no carrier partners, and the company often opts to sell phones as-is, no carrier agreement required. That would mean buyers will not get the discount that wireless companies often chip in when the buyer agrees to stick with their service for two years. In order to walk out the door with an N86, buyers will have to fork over nearly three times as much cash as they'd have to in order get a competing device.

Nokia emphasizes the device's camera features. "The Nokia N86 8MP is one of the most advanced imaging devices with its 8-megapixel camera with LED flash, Carl Zeiss Optics and a beautiful 2.6-inch AMOLED screen," company spokesperson Martin told TechNewsWorld when asked if the device isn't a little pricey.

However, in the smartphone realm, the iPhone is the one to beat -- and the iPhone 3GS only has a 3-megapixel camera. "You need more than just a phone with an 8MP camera," Julien Blin, principal analyst and CEO at JBB Research, told TechNewsWorld. "The iPhone has the whole package -- great design lots of mobile apps, a strong brand ... . Remember, the 3GS sold 1 million units in its first weekend."

If having an 8-megapixel camera is important, consumers can always pick up a nice one for less than $300. Add that to a $200 iPhone 3GS and you have the total package for less than $500.

"People aren't going to care that the phone is equipped with Carl Zeiss technology," Laura DiDio, principal at ITIC, told TechNewsWorld. "They're going to look at the price tag."

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IPhone -Can Nokia Sway U.S. Carriers with iPhone, Palm Pre Standing Guard?

Poor Nokia (News - Alert) has taken a beating last week in the popular press. It gets beaten up by Wall Street for its latest results, Americans just don’t buy its phones like the rest of the world does, and the phones just aren’t as sexy these days as the almighty iPhone or Palm Pre.

What’s a company to do?

 

Part of Nokia’s problem with the IT and North American market has been the relative lack of CDMA offerings for Verizon and Sprint’s (News - Alert) networks. Nokia’s bread-and-butter is GSM, so North American users have been forced to either buy relatively limited – but subsidized – models through AT&T (News - Alert) and T-Mobile or go buy an “unlocked” model at list price down either online or at the local Nokia store (of which there are only two, in New York City and Chicago).

 

List price for the elite Nokia N97 phone is $600 as of Sunday afternoon, a drop of $100 from a couple of days ago. For that price, you get a phone with a 3.5 inch color touch screen, around 9.5 hours of talk time and up to 17.9 days of standby time on a GSM network, full slideout keyboard, up to 32GB of internal memory, a microSD card slot, GPS, Bluetooth, 802.11 b/g WiFi (News - Alert) and all kinds of other whistle including a 5 megapixel camera. Software includes a full Web browser, Flash video support, and streaming video support. It supports Microsoft Exchange, so it can talk to Outlook without breaking a sweat.

 

Put the N97 hardware specs next to the Palm Pre, and the Nokia phone smokes the Pre. In addition, the N97 can WiFi “tether” a laptop or netbook to the Internet – a trick neither the Pre nor the iPhone (well, AT&T) currently allow in the United States.

 

The rest of the world likes Nokia’s phones – a lot. Last quarter, the company shipped 9.3 million N and E series phones worldwide during the quarter; more than all the BlackBerry (News - Alert) and iPhone sales put together during the same time, says The Motley Fool. But in the United States, it has about a 1 percent share of all the smartphones.

 

Nokia realizes it has a lot of work to do if it wants to win over America. The company plans to try to sell more of its smartphones through U.S. carriers and has decided to stick names rather than product numbers onto new phone. It is also investing in research to fine-tune its offerings to U.S. tastes, including the user interface.

 

To woo U.S. carriers, Nokia has opened up an office in San Diego to help manage its relationships with Verizon and AT&T. It also plans to directly ship new smartphones to the United States at the same time they ship in other countries and work more on opening up its operating system for both developers and end users searching for apps.

 

Will this all work? I don’t know, but Nokia definitely has its work cutout for it trying to displace the BlackBerry within the enterprise environment and trying to jump ahead of the iPhone and Palm Pre in the latest-cool-toy value for power users. 

 

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Nokia Xseries and Cseries mobile phones tiped

Nokia is certainly looking to improve its fortunes with the mobile phone market. The company has filed for a trademark on two new names that will presumably be mobile phone lines.

The Finland trademark database has divulged the coming Cseries and Xseries devices. Exactly what the device ranges will be is unknown at this time. One of the names may well be the Nokia netbook that is expected.

SlashGear figures that the Cseries devices will be mainstream phones and the Xseries may be Maemo 5 based devices. The database also held references to the Nokia Booklet and the IIo by Nokia according to reports

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Nokia N86 8-Megapixel Smartphone Coming to U.S.

The Nokia N86 8MP smartphone will soon be arriving in the U.S. and joining a growing selection of mobile phones with cameras that give point-and-shoots a run for their money. The Sony-Ericsson c905a Cyber-shot, which arrived in AT&T stores July 19, features an 8.1-megapixel camera.

Nokia’s flagship imaging device, the N86 8MP, will be arriving in the United States in “the coming weeks,” Nokia announced July 17.

Featuring an 8-megapixel camera, Nokia touts the N86 as a true replacement for a point-and-shoot camera. It features a Carl Zeiss lens, dual LED flash and a 2.6-inch AMOLED (active-matrix organic light-emitting diode) screen.

(AMOLED is said to offer power savings as well as better image quality and a more rugged display than LCD options. In March, the Samsung Impression was the first AMOLED touch-screen to arrive in this country.)

Also notable is the N86’s two-way sliding design. It slides vertically in both directions—slide the screen up to reveal a keypad, and slide it down to discover a control panel for video functions and more.

An accelerometer means the N86’s screen can also be viewed in landscape mode, and a built-in “kickstand” allows the device to rest at an angle convenient for video watching.

A Share Online client comes preinstalled, for one-click uploads of video to social networking and other sites. And Ovi services, such as Ovi Maps, N-Gage and Ovi Files, also come preloaded.

Nokia is mum on many more details, but fan site NokiaN86.org is reporting that the N86 additionally features a shutter that operates at up to 1/1,000 second; video recording at a resolution of 640 by 480; 8GB of internal memory, plus a microSD slot for more; Bluetooth 2.0; Wi-Fi 802.11b/g connectivity; an internal compass; an FM radio; assisted GPS; and support for triband 3G HSDPA/HSUPA networks. It’s also said to run Symbian’s S60 3rd Edition.

The N86 will retail for $558 and be available through Nokia Flagship stores.

On July 15, AT&T introduced a point-and-shoot replacement phone, the Sony Ericsson C905a Cyber-shot. Packaged inside the 3G slider phone, it features an 8.1-megapixel camera with face detection, an Xenon flash with red-eye reduction, auto-focus, 16-times digital zoom and BestPic technology, which shoots multiple images with each shutter click.

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Nokia prepping C-Series of phones?

Nokia filed a trademark application for “Cseries” last April, according to the Finnish blog Puhelinvertailu. As we know, Nokia’s already had the N-Series (for entertainment) and the E-Series (business), but what’s this new series for?

We just can guess what “C” stands for. Computer? Consumer? Community? Camera? Not sure. However, I agree with what Dan Nosowitz of Gizmodo says:

seeing as how Nokia doesn’t name their lines after English words (business does not start with E, and entertainment does not start with N. We’re pretty sure).

Yes, the “E” in “E-Series” stands for businEss, and the “N” in “Nseries” stands for eNtertainment. So, what will the “C” in “C-Series” stands for? I just can guess: “C” stands for  aCcess (for Internet phone) or aCcent (for fashion phone)? Any suggestion?

So we’ve just got to wait and see.

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Accenture Acquires a Phone Concern From Nokia

Accenture, the technology consulting firm, agreed to buy a Nokia business that advises and provides services for cellphone makers using the Symbian operating system, the companies said Friday. The unit helps phone manufacturers make the operating system work with their products, and aids chip makers and carriers. Terms were not disclosed. The deal adds 165 employees to Accenture’s organization and lets the company expand a business that provides consulting services related to mobile operating systems. Symbian is the world’s most popular software running more advanced cellphones, and is used on more than 250 million handsets.

Symbian, managed by the Symbian Foundation of London, competes with Microsoft, Research In Motion and Apple in making software for phones that allow users to access the Web, check e-mail, play music and transmit video clips. The deal is expected to close by the end of the third quarter. 

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Accenture to acquire Nokia's Symbian service experts

In a move that will further increase Symbian's independence from Nokia, the Finnish phone manufacturer has agreed to sell its Symbian Professional Services unit to technology consultant firm Accenture.

The unit is responsible for customer engineering and customer support for Symbian OS, the world's largest operating system for smart phones. About 165 people will be transferred to Accenture as a result of the agreement, the terms of which were not disclosed.

The transaction, announced Friday, is expected to close by the end of the third quarter, according to a press release from Nokia.

Nokia acquired Symbian last year and transferred the operating system to the nonprofit Symbian Foundation. The organization on Thursday announced its take on application distribution--the Symbian Horizon application-publishing platform. 

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Nokia Dumps Symbian Services Unit

Is this the beginning of the end for Symbian? On July 17, Nokia announced it will sell its Symbian professional services unit to Accenture. The division provides engineering consulting and product development services to mobile phone manufacturers, chip makers and wireless service providers that develop products based on Symbian software for mobile phones. This software is the most widely used in smartphones today, but it’s been fast losing ground to rivals such as Android.

The sale is yet another indication that “Nokia keeps distancing itself from Symbian, divesting of nearly anything that is directly related,” Jack Gold, principal at J. Gold Associates, wrote in this morning’s note. “This reinforces our earlier position that Symbian is no longer strategic to Nokia’s success.” Considering that Nokia is the world’s No. 1 cell phone maker, that’s bad news for Symbian.

Even though Symbian has been restructuring and making an effort to attract developers in order to stabilize its market share and regain its momentum, that may not be possible now as even its biggest supporter, Nokia, moves on to greener pastures. “I’d expect Nokia to offer ‘other’ [software, such as Android], within the year,” Gold writes. As it makes a push into Mobile Internet Devices, or tablets, Nokia will use alternative software rather than Symbian for those gadgets as well, he says.

Symbian will have “a tactical rather than a strategic potion in Nokia’s future,” Gold writes. And that likely means that Symbian will continue to see its market share melting despite all the changes and innovations it makes to the software.

That said, this is a smart move for Accenture, which likely picked up the unit on the cheap (the amount of the deal has not been disclosed). As handset makers and carriers launch their app stores and keep on innovating on handset software, they will want to outsource more of that work to reduce costs. That’s where Accenture will come in.

The company, which already has expertise in Windows Mobile and Symbian software, plans to leverage the staffers and know-hows it acquires from Nokia to expand into all kinds of mobile software, including Android. “We have a huge ambition in this space, and this is a strategic acquisition,” says Jean-Laurent Poitou, managing director of Accenture’s Electronics & High-Tech industry group.

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UPDATE 1-Accenture to buy Symbian services unit from Nokia

* Nokia says deal will help Symbian realise full potential

* No price disclosed for sale of unit with 165 staff

* Acquisition expected to close within 90 days

(Adds details on unit, background, shares)

LONDON, July 17 (Reuters) - Technology consulting firm Accenture (ACN.N) has agreed to buy a unit of Nokia (NOK1V.HE) responsible for servicing the Symbian smartphone operating system that Nokia has given to an open-source foundation.

The parties did not disclose the price on Friday that Accenture would pay for the business, which has about 165 staff who provide customer support and engineering for Symbian, the world's most popular smartphone system.

Nokia decided last year to make Symbian technology freely available in the hope it would encourage Internet developers to build innovative applications on the platform, helping it win back market share.

Peter Rupke, Nokia's head of devices, said in a statement on Friday: "This agreement allows the Symbian professional services team to realise its full potential in the supply of independent services to the open-source ecosystem."

Accenture said the acquisition would expand its ability to help customers in the fast-growing market for converged mobile services, as phones become more and more like computers and computing becomes more mobile.

The transaction is expected to complete within 60-90 days.

Nokia shares, which had been down about 2 percent after the company gave a disappointing outlook on Thursday, recovered slightly to trade down 1.8 percent at 9.30 euros by 1236 GMT. (Reporting by Georgina Prodhan; Additional reporting by Eva Lamppu in Helsinki; Editing by Jon Loades-Carter) 

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Nokia profit from phones falls 66%

STOCKHOLM–Nokia Corp., the world's top cellphone maker, said yesterday second-quarter earnings fell 66 per cent as the global recession sapped demand, and its stock sagged after it scrapped its target to gain market share this year.

Net profit was 380 million euros ($601 million Canadian), down from 1.1 billion euros in the same period a year earlier. Sales tumbled 25 per cent to 9.91 billion euros.

Analysts polled by SME Direkt had forecast a profit of 327 million euros and sales of 10.1 billion euros. Nokia shares fell nearly 15 per cent to 9.47 euros in Helsinki, and in New York closed down $2.20 (U.S.), or 14.16 per cent, at $13.46

Nokia shipped 103 million mobile devices in the quarter, down 15 per cent from a year earlier, but better than some analysts had expected. The average selling price of a Nokia handset hit 62 euros from 74 euros.

"It almost feels like Nokia has been doing a great job at keeping shipments alive, but has been forced to cut prices to keep volumes up," said Neil Mawston, a telecom analyst at Strategy Analytics.

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Nokia May Lose Smart-Phone Buyers Without Apple-Like Programs

July 17 (Bloomberg) -- Nokia Oyj, the world’s largest mobile-phone company, may be losing smart-phone customers by failing to come up with applications and designs to take on Apple Inc., analysts said.

Nokia plunged the most in more than five years yesterday, shaving 6.1 billion euros ($8.6 billion) off its market value, after lowering targets for market share and profit margins.

“This is a very tough spot for Nokia to be in right now,” Colin Gillis, an analyst at Brigantine Advisors in New York, said in a Bloomberg Radio interview. “They’re going to need the types of devices that people can use to download applications and the kind of devices that people can be interactive with, the types of devices we’re seeing out of Apple.”

Nokia’s share of the smart-phone market was 41 percent in the second quarter, down from 62 percent in 2005. Nokia estimates its overall market share was 38 percent in the period, down from 40 percent a year earlier. The overall share will be little changed this year, compared with a previous forecast of an increase, the Espoo, Finland-based company said yesterday.

Instead of building a single flagship device such as Apple’s iPhone, Nokia has multiple smart-phone lines like the E Series and N Series, as well as music phones. That approach makes it difficult to attract software developers, who prefer to write programs for a single platform with a large user base such as the iPhone than tailor their applications for a variety of handsets, said Broadpoint Amtech Inc.’s Mark McKechnie.

“They do need to figure something out to keep themselves relevant for users,” the San Francisco-based analyst said. “The smart phone is critical to maintain a lead in the overall handheld market.”

Stock Performance

The operating margin in the main devices and services division will be little changed in the second half from the first, when it was 11.3 percent. Nokia earlier predicted the margin would be in the “teens.”

Nokia plunged 1.63 euros, or 15 percent, to 9.47 euros in Helsinki yesterday, the most since April 2004. Before that, the stock was little changed for the year.

Nokia won’t return to its days of 40 percent share of the overall mobile-phone market and 20 percent operating profit margins, said McKechnie, who rates Nokia shares “neutral.”

Nokia anticipates the global handset market will shrink about 10 percent in 2009 because of slumping economies and consumer spending. The market for smart phones, which can run computer-like applications, is the industry’s fastest-growing segment, according to researcher Gartner Inc.

Software Battle

“Competition is increasing in the smart-phone area as many participants rush into one of the few growing markets,” Chief Executive Officer Olli-Pekka Kallasvuo said on a conference call with analysts yesterday.

Those rivals include Palm Inc., which last month started selling its Pre model and opened its App Catalog. Research In Motion Ltd., the maker of the BlackBerrySamsung Electronics Co. have also opened applications stores. smart phones, and

Another dominant software player making inroads in the market is Microsoft Corp., whose Windows Mobile operating system works on Samsung, Sony Ericsson Mobile Communications Ltd. and HTC Corp. phones. Google Inc. is also aiming for a share of the pie with its Android mobile operating system.

Nokia has been under siege before. Its global market share fell to the lowest in five years in 2004 as customers picked clamshell phones made by Motorola Inc., Samsung and Sony Ericsson, a trend Nokia had discounted. Nokia fought back with clamshell models, clawing back market share and reaching 40 percent in 2007.

N97 Debut

The Finnish company began to refresh its smart phones last month with the N97, which combines a touch screen and a snap-out keyboard. The device sold 500,000 units in June, Kallasvuo said on the call yesterday. Cupertino, California-based Apple sold more than 1 million units of its latest model, the iPhone 3G S, in the first three days of its debut last month.

Software downloads also have Nokia management’s attention. Ramping up the online Ovi Store for applications is central to Kallasvuo’s vision of Nokia becoming a software provider that gets revenue from customers continuously, and not just every few years when they buy a new mobile phone.

Creeping Up

Nokia’s share of worldwide smartphone sales fell to 41.2 percent in the first quarter from 45.1 percent a year earlier, according to Gartner, while Apple’s doubled to 10.8 percent. Nokia shipped 103.2 million phones in the quarter, a 15 percent drop from a year earlier, while its smartphone sales increased 10 percent to 16.9 million units.

Second-quarter net income at Nokia fell to 380 million euros from 1.1 billion euros a year earlier, while revenue slid 25 percent to 9.9 billion euros.

“Nokia is way ahead in all regions of the world, except the USA, where it is being battered by Apple and BlackBerry,” said Neil Mawston, a director at researcher Strategy Analytics Ltd. in Milton Keynes, England. “The USA is now the world’s most important smartphone market and Nokia urgently needs to recover in that region if it is to be taken seriously as a mobile consumer services player.”

The company said yesterday it lost overall market share in Latin America, the Asia-Pacific region and North America from a year earlier.

“They need to get a better user interface on their devices, and they need to do that very soon,” said Carolina Milanesi, an Egham, U.K.-based analyst at Gartner. 

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