Nokia: Thin Is In

Nokia Corp. (NYSE: NOK) is planning to start shipping slim new phones intended to compete with Motorola Inc. (NYSE: MOT)'s wildly popular Razr handsets in the first half of next year, according to a research note issued by Lehman Brothers today.

The analysis firm expects that Nokia's thin phones, anticipated in the market for some time, will be unveiled before the end of this year and on sale in 2007. Nokia hasn't yet responded to calls about the new phones.

The move to skinny handsets is a logical one for the Finnish vendor. Motorola has seen a significant bump in sales thanks to the Razr models, released in late 2004. The company leads the U.S. market with a 29 percent share over Nokia and Samsung Corp. in the first quarter of 2006, according to the NPD Group. The forthcoming Q device from Motorola is also expected to sell well in enterprise circles. (See Is That a Q in Your Pocket?.)

Jack Gold, analyst at J.Gold Associates, says that Nokia has already been displaying some of its skinny new ideas.

"They have been showing some concept phones," he tells Unstrung. "They have one that is a Razr competitor and one that has a [hard-drive based] music player built in."

Nokia's follow-on moves remind Charles Golvin, device analyst at Forrester Research Inc. , of what happened with flip phones in the late nineties, when Nokia was late in introducing models based on that form factor as well.

"It does strike me as eerily similar to what happened with flip phones, where they are once again playing catch-up with a market trend," says Golvin. "More important is the acceptance they get in the market for their own innovations, in particular the N series devices."

— Dan Jones, Site Editor, Unstrung

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