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Nokia's Slim Pickings for 2007Nokia's Slim Pickings for 2007

Finnish vendor is hoping that new thin phones will trigger a US renaissance

Dan Jones

November 29, 2006

2 Min Read
Nokia's Slim Pickings for 2007

Nokia Corp. (NYSE: NOK) is getting closer to launching new thin cellphones that it hopes will improve its profitability and market share in North America, home of its major rival, Motorola Inc. (NYSE: MOT). The Finnish vendor, however, is unlikely to see a major turnaround stateside before 2008, analysts predict.

Nokia has been showing off some of its new products for 2007 at its analyst conference in Amsterdam. The vendor has made no secret of the fact that it intends to bring out more skinny cellphones in a bid to compete with Motorola's world-beating RAZR line. (See Nokia: Thin Is In.) The company added a little more color to its skinny story at the analyst day.

"Nokia's presentations were dominated by the issue of thin devices," writes Nomura Securities analyst Richard Windsor in a research note. "Nokia has spent the last year migrating its mid-range platform to support thin devices which should allow 'thin' to be incorporated into almost any device Nokia chooses to make."

The Nokia 6300 will be the first of these products available in 2007. The vendor also gave sneak previews of a thin multimedia device -- the N76 -- and a skinny sub-$80 phone, codenamed "Barracuda."

The pressure's on Nokia, which last month reported a 4 percent drop in quarterly earnings, despite selling more phones. (See Nokia Stumbles in Q2.) "Nokia is promising to become a stronger competitor in the US, taking their CDMA engineers and transitioning them toward designing handsets specifically for the US market," notes Citigroup analyst Daryl Armstrong. "We do not expect that Motorola will have to deal with these phones competitively until 2008."

Overall, Nokia is predicting that phone volumes will grow by up to 10 percent in 2007. This is mildly bullish compared to numbers from Citigroup Investment Research, which is predicting growth of around 7 percent for the market next year. "Nokia seems to be more constructive on the prospects for replacement demand in emerging markets than we are," says Armstrong.

Nokia does say, however, that the average selling price of a device is likely to fall, in part because of more sales into developing markets.

— Dan Jones, Site Editor, Unstrung

About the Author(s)

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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