Global Economics

Nokia's Touch Screen 5800 Nods to iPhone


Boasting many of the iPhone's features, the 5800 XpressMusic handset targets the young by offering a year's worth of free music downloads

The new Nokia 5800 XpressMusic handset certainly looks like an iPhone. Same rounded corners, similar screen, and of course software operated with the touch of a finger. But don't—repeat, don't—call it an iPhone killer. With 40% of the global handset market, Nokia (NOK) is not in the business of copying puny rivals such as Apple (AAPL). Rather, Anssi Vanjoki, Nokia's executive vice-president for markets, calls the 5800 a "youth-oriented multimedia product made very affordable to the target audience of heavy music consumers."

Maybe a better description of the 5800 would be iPhone triangulator. No, the handset launched on Oct. 2 in London is not aimed directly at the hard-core iPhone crowd. But the 5800 does indicate how Nokia hopes to ensure that Apple remains a niche player in the global handset market. Nokia will try to smother Apple and other rivals with a range of touch products, aiming to peel away different target groups.

And Nokia will launch the products simultaneously around the world, exploiting a distribution system that neither Apple nor any other competitor can match. The 5800 can handle 60 different languages covering 90% of humanity and will be in shops all over the globe, including the U.S., before the end of the year, Nokia says.

Musical Bonus

As Vanjoki points out, the 5800 is designed for young folks whose lives revolve around music. The $407 price tag, before taxes and subsidies, is more than a third below that of an unsubsidized iPhone. And the 5800 will be available from a range of telcos, in contrast to the iPhone, which is officially available only from select providers such as O2 (TEF) in Britain or T-Mobile (DT) in Germany.

Perhaps the most important feature of the 5800, though, isn't hardware but the built-in music collection. Beginning next year, the phone will feature Nokia's Comes With Music service—a year's worth of downloads from a catalog that includes all four major labels and 4 million songs (BusinessWeek.com, 9/2/08). It may be the music, more than the device, that's really aimed at Apple. Anyone who buys a 5800, with a massive selection of music embedded in the price, is unlikely to pay for the same music on iTunes.

So how does the 5800 compare with the iPhone? It's more sophisticated in some ways, less so in others. The more compact 5800 has a one-finger touch screen, in contrast to the iPhone, whose surface can handle input from two fingers simultaneously. The iPhone's two-finger interface lets users do cool things, such as easily shrink or expand images on the screen. On the other hand, the 5800, unlike the iPhone, has a screen that vibrates ever so gently when you touch it, providing subtle confirmation that the device is responding to your command.

Sophisticated Insides

The 5800's inner workings also are more advanced. (Saying such things always generates hate mail from iPhone fans.) It's a fact that Nokia has much more experience than Apple—or anybody else, for that matter—in packing an astonishing number of radios and other electronics into a small package and making everything work reliably.

The 5800 has a better camera, including a Carl Zeiss lens. Its Internet browser can handle Flash files, which the iPhone can't. And it has built-in GPS navigation (as do the newest iPhones). Since Nokia hasn't yet released test versions of the 5800, it's impossible to say which is better. But given how much effort Nokia has put into navigation (it's already the world's largest maker of GPS devices), it will be a surprise if the new phone doesn't turn out to be more precise and better at snagging a satellite signal than the iPhone. Nokia will include an introductory subscription to voice navigation in the price. "It's increasingly about the combination of services that come with the product," Vanjoki says.

The 5800 should be seen as Nokia's first attack on the touch screen phone market. A real challenger to iPhone will come some time in the next few months, when the Finns unveil an Nseries device with a touch screen. The top-of-the-line Nseries handsets are the ones that most appeal to the same tech connoisseurs who have made the iPhone such a phenomenon. Vanjoki might let you get away with calling that product an iPhone killer.

Business Exchange related topics:

Product Design

Apple

iPhone

Digital Media

Ewing is BusinessWeek's European regional editor.

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