Bloomberg News

Nokia to Reduce Product Line-Up Further in Transition, Elop Says

February 28, 2012

(For more on Mobile World Congress, see SHOW <GO>.)

Feb. 28 (Bloomberg) -- Nokia Oyj, the world’s third-largest smartphone maker by shipments, will shrink its device line-up further after adopting Microsoft Corp.’s Windows Phone platform last year, Chief Executive Officer Stephen Elop said.

“We don’t see it as a single-device strategy or anything like that, but it will be pared down,” Elop said in an interview at Mobile World Congress in Barcelona, without specifying any product lines that will be ended.

Elop shifted to Windows Phone last year after determining Nokia’s Symbian and MeeGo systems couldn’t keep up with Google Inc.’s Android, the fastest-growing smartphone platform, and Apple Inc.’s iPhone. The company yesterday unveiled the Lumia 610, a model priced at 189 euros ($250), 30 percent lower than Nokia’s current cheapest Windows Phone product.

The Lumia 610 will compete with ZTE Corp.’s Orbit and other devices taking advantage of relaxed hardware requirements from Microsoft to expand Windows Phones from tech geeks to more ordinary users and attract applications developers.

“Getting more manufacturers is a good thing, because the principal competition is Android,” Elop said. The CEO said he still believes Nokia has more opportunity to differentiate itself with Windows Phone than it would have with Android.

Diamond Encrusted

The manufacturer, based in Espoo, Finland, offers products from basic phones such as the 20-euro Nokia 100 to diamond- encrusted models costing thousands of euros in the Vertu line. The company began slimming down its line-up, which formerly consisted of hundreds of models and variants, before Elop’s appointment as CEO in September 2010. Since then, Elop has announced more than 10,000 job cuts.

Nokia’s feature phones, including the Asha product line that debuted October, accounted for about 46 percent of sales last year. Feature phones, which are made with cheaper components and run simpler software such as Nokia’s Series 40, are primarily sold in emerging markets, where they compete with cheaper smartphones.

Its product line now includes four Lumias, including the high-end Lumia 900, the company’s LTE-technology handset offered in the U.S. through AT&T Inc. The European version announced this week, costing 480 euros, won’t have LTE because the continent’s network isn’t ready, Elop said.

Since mid-2011, Nokia has announced a half-dozen new devices on revamped versions of the 10-year-old Symbian platform and a half-dozen Ashas. It continues to sell scores of older models.

New Symbian Model

Nokia introduced a new Symbian model yesterday, the 808 PureView device that features a 41-megapixel camera sensor. The technology was installed first on a Symbian phone because it was developed there and was the fastest way to get it to customers, and it will come to other lines in the future, Elop said.

The company ended MeeGo, a platform it was developing jointly with Intel Corp., when it introduced what was billed as the first and last device using the technology in mid-2011. Elop has said some MeeGo work will live on in other projects focused on “the next disruption” in mobile phones.

Nokia also simplified is product names last year, ending subgroups such as the multimedia-focused N Series and the business-oriented E Series. Its handsets now have three-digit numbers roughly in order of pricing, along with the the word “Lumia” on Windows Phones and “Asha” on feature phones.

Smartphone sales may grow 39 percent this year from 472 million units, according to researcher Gartner Inc. Nokia’s market share in smartphones fell to 12 percent in the fourth quarter from about 30 percent a year earlier, Gartner said.

--With assistance from Beth Mellor in London. Editors: Tom Lavell, Kenneth Wong

To contact the reporters on this story: Jonathan Browning in Barcelona via jbrowning9@bloomberg.net: Diana ben-Aaron in Helsinki at dbenaaron1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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