Nokia's Netbook: Destined to be Niche

Posted by: Damian Joseph on August 25, 2009

News came out yesterday that Nokia (NOK) will be entering the crowded netbook market. For those who aren’t familiar with the product, a netbook is a small laptop that can access the Web over a cellular connection.

I happened to have sat down yesterday with the company’s chief development officer, Mary T. McDowell, and strangely, the new netbook never came up…

Instead, based on what McDowell had to say, Nokia's main push these days is software. We spoke about the next wave of innovation in the mobile market, which McDowell believes will be in software applications. In fact, she said Nokia is becoming more 50/50 software and hardware mixed.

For example, the wireless company released Nokia Life Tools late last year, a bundle of agriculture and education applications for consumers in emerging markets. And it released Comes with Music phones in non-U.S. markets, which allow consumers to download unlimited music from their phones for a year.

McDowell also said Nokia's devices will increasingly become entertainment platforms—music, movies, applications, etc... The company is eager to expand its Ovi Store to sell this type of content.

So where does that place the new netbook, or mini-pc, as Nokia is calling it? Squarely in the niche market category. This doesn't represent a new approach for the company.

There are two main reasons: One, it runs Windows. This is obviously a play to the working crowd, otherwise, it would be running the company's Symbian operating system, which Nokia turned open-source last year. Two, it's a cellular-connected, 3G device. Selling it in the U.S. would be tons tougher, because of the closed nature of the telecom business here. The netbook has its best chance in Europe, where Nokia has better relationships with providers.

So let's call this a mini-laptop for white collar workers who reside in Europe. Nokia's business is about scale, not niche.

That's not to say it won't be successful. I walked over to ask my colleague Arik Hesseldahl, a BusinessWeek technology writer, his thoughts on the situation. He said the netbook "has a business case where 3G is reliable," but ultimately, "it will come down to its marketing and cell plans."

Here's a YouTube clip previewing the new netbook.

And here's BusinessWeek writer Olga Kharif's take on the news.

Reader Comments

Interconnect

August 26, 2009 4:51 PM

With Open Source Android, RIM's BB heading the market, with CDMA's foray in small handset devices are about to be released from Qualcomm, at very attractive prices in the international markets. With the average prices of
$250 for the Netbook and the average of smart phone as Black Berry, the iPhone and the likes for prices averaging $500-00. Adding just 3G is not enough. Yes the reality it does more than the smart phone of $500-00 at prices $250-00. The 8 cell phone with market for Pakistan, India, China. The smart phone average will be $200-00 instead of the current $500-00.

john

August 27, 2009 3:41 AM

Do Nokia have the marketing acumen to achieve its plans, even then do they have the innovating talent to satisfy the expectation of the public, frankly speaking i doubt, the only way is to get smart thinking people and get the best possible ideas. Is anyone from Nokia is listening?

Noel

August 27, 2009 11:50 AM

Nokia's innovation is not seen in USA due to the Telecom companies. I belive this will be hit in South Asia and South East Asia which has the largest growth for mobile devices.

Proud Finn

August 27, 2009 10:21 PM

No, John, Nokia became the world's largest mobile phone manufacturer because they know absolutely nothing about marketing! Unlike all those wonderful American mobile phone makers, who were they again?

Jaybird09

August 28, 2009 10:52 AM

Hi Proud Finn, one thing you have to understand about us Americans is that we cannot even name most of the sates in our own country and cannot find most countries on a map, even if it is labeled. I have been a fan of Nokia for years and have used Nokia phones for many years in US. When I go abroad I am amazed at the wide variety of phones that Nokia has in the market place. Most Americans fail to understand that while Apple has one phone and Motorola has a few, Nokia has literally 40 to 50 different types of phones available internationally. I do not have a doubt that Nokia will keep doing well in Europe and the emerging markets and this make the US market a nice to have but not a need.

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