Nokia unveils showy phone models

HELSINKI, Finland -- Nokia Corp. introduced several new models Monday, including its first flip phones, catching up with competitors who have eroded the company's dominance in cellular handsets with the popular clamshell models.

Chief executive Jorma Ollila said the company, which has acknowledged losing market share of late, had completely revamped its offerings and strategy.

"We have reviewed the timings and pruned our portfolio, adding some new products and accelerating others -- and during this process, we have even killed some product plans," he said.

The model Nokia exhibited most prominently during its announcement Monday was advertised as the world's smallest 3G, or third- generation, phone -- the 6630.

At just 4.5 ounces, the 6630 features a 1.2-megapixel camera and an MP3 player and will support Internet transmission at 40 times the speed of technologies currently deployed, Nokia said.

The other high-end model, a clamshell 6260 with a swiveling flip, features a video recorder, Web browser, e-mail and VPN, with Bluetooth network and an optional wireless keyboard.

On the low end -- a segment Nokia has not been known for -- the Finnish company introduced the 2600, with a full-color display and handsfree speaker. In a nod to its rivals, Nokia also announced the 2650, a similarly equipped low-end flip phone, that has GPRS connectivity.

All the new models are expected to be in stores in the last three months of 2004.

Analysts called Nokia's latest move the first indication that the phone giant is mimicking competitors rather than setting the standard in design and consumer preference.

"It is not enough for Nokia to release phones that are equal to those of its competitors. It must do better than that," said Mikael Tornwall, an analyst at Dagens Industri.

Monday's announcements caused little stir among investors, and Nokia shares fell 2 percent to 11.66 euros ($14.03) in trading on the Helsinki Stock Exchange.

Nokia recently slashed prices for several models already on the market, following the lead of competitors whose phones have been consistently cheaper.

And while other cell phone manufacturers have been increasing their share of the global market with almost miniature flip phones, high-resolution color displays and increasingly hip styling, Nokia has been perceived as the vendor of robust reliability.

Earlier this year, when the company acknowledged losing market share, it largely blamed a gap in mid-range phone models. Nokia now plans to introduce 40 models this year.

Ollila said Nokia's global market share has fallen to 32 percent from 35 percent as it lost ground to competitors including Motorola, Samsung, LG and Siemens.

The market research group Gartner Inc. puts Nokia's share even lower -- at 28.9 percent in the first quarter of 2004, down from 34.6 percent a year earlier.

U.S.-based Motorola has 16 percent of the market, and South Korea's Samsung has 13 percent, Gartner said, followed by Siemens with 8 percent, Sony Ericsson with 5.6 percent and LG with 5.3 percent.

Despite the increased technical wizardry the new phones aspire to, Nokia appears to be trying to stick with products that directly appeal to the mainstream.

The company said it wouldn't offer video-calling functions in any of the new phones, as it does not expect customers to pay extra for the feature, which requires two embedded cameras.

Nokia said it expects mobile phone sales to reach 600 million units this year, one-third of them camera-phones, which are expected to become more popular as prices come down.

The company projects that the overall number of global cell phone users will rise 33 percent by 2007 to 2 billion, with much of the growth coming from Asia.

Some 1.5 billion people now have mobile phones, and at least 300 million new users will come from the Asia-Pacific region, said Simon Beresford-Wylie, Nokia's senior vice president for the region. He didn't specify where the remaining growth would come from.

Revenue from exchanges of data -- such as text and images -- via mobile phones will likely rise to 30 percent of global mobile revenue by 2008, up from about 15 percent now, Beresford-Wylie said. He said he expected the number of 3G networks in the Asia-Pacific region to jump from six to 20 by next year.

Nokia, based in Espoo just outside the Finnish capital, has a market capitalization of 54.4 billion euros ($65.3 billion) with sales in 130 countries with 53,000 employees.

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