Nokia Unveils Netbook, Beats Apple to the Punch

Posted by: Olga Kharif on August 24, 2009

(This blog is a collaboration with my colleague, BusinessWeek writer Jack Ewing.)

On Aug. 24, Nokia unveiled its first netbook. Called the Nokia Booklet 3G, the long-rumored device features a 10-inch screen, weighs 2.75 pounds, runs Windows, and can connect to Wi-Fi as well as to cellular wireless networks.

This may be a move by Nokia to grab initiative from rival Apple. In the past several years, the iPhone maker has managed to grab significant share in the lucrative, fast-growing market for smartphones away from Nokia. Apple is also rumored to be developing a tablet netbook. With this announcement, Nokia may be trying to beat Apple to the punch.

Netbooks should help fuel Nokia’s growth, which has slowed down in recent months. The cell phone business is not what it used to be. Amidst the global economic downturn, the industry’s sales of handsets should decline 10% this year, according to Nokia’s forecasts. Meanwhile, netbook shipments should double this year, according to analyst estimates.

Many netbooks are sold through traditional Nokia customers, carriers, and, thus, represent a natural extension of the company’s business. In Europe, wireless service providers account for more than 25% of all netbooks sold, according to consultant IDC. The carriers typically sell the small, cheap notebooks bundled together with Web connectivity services.

Carrier subsidies on netbooks are roughly similar to those for smartphones, which is why, for Nokia, entering this market makes perfect sense. Nokia is entering a market that offers fairly good margins.

That netbooks would offer good margins may seem counterintuitive. After all, traditional PC industry’s margins are razor thin. But consider: In its latest, second quarter, Nokia’s devices and services business’s margins hovered around 4.3%. PC maker Hewlett-Packard’s operating margins in personal systems, which encompass PCs and notebooks, fell to 4.6% in the quarter ended July 31. So, in actuality, Nokia’s and H-P’s financial metrics are not that different.

Meanwhile, netbook margins should be fatter. Here’s one reason: Nokia’s Booklet comes bundled with Nokia’s Ovi services, which will, in the long run, allow Nokia to make additional revenues on mobile e-commerce and extra features.

The big question that remains: Will consumers love Nokia’s netbook? Nokia has a strong brand and a loyal following in most global markets, except for the U.S. The netbook comes equipped with Windows, which consumers want. Nokia will announce the device’s availability and pricing on Sept. 2.

Reader Comments

Anonymous Freetard

August 24, 2009 1:10 PM

"The netbook comes equipped with Windows, which consumers want."

That's right - keep repeating it an one day it might be true.

NOT.

LG

August 24, 2009 1:14 PM

"Beats Apple to the Punch"? Olga...you got to be kidding! do this for me:I like to see you investing your own money on Nokia and I will invest on Apple....call me after Apple release Apple Tablet and call me.

So out of touch report.

Collin

August 24, 2009 1:16 PM

How does this beat Apple to the punch? Nokia is just releasing another netbook running a stripped down version of Windows XP. Nothing new here, keep moving.

Roopa

August 24, 2009 1:27 PM

It is important to find out why Nokia has entered Note(net)book market. If it is a me too kind of a product , sorry people may not embrace it. If it is to bring in a change to the boring list of note books with no innovation whatsoever , then we need to see the difference and see if there is an innovation to the level which Apple brought by boldly entering mobile phones taking on the bigwigs head on.

Jon T

August 24, 2009 2:14 PM

Ha ha ha. Tell me on something about this product that is remotely innovative.

Just another (mad?) player in the bottom feeding going on to produce cheap, underpowered, poor products that will drive customers mad.

Nokia has lost it...

kevinkris

August 24, 2009 2:49 PM

Why can't they make a good phone?

Pall

August 24, 2009 2:51 PM

Not likely with a clunker of an OS.

booch221

August 24, 2009 3:22 PM

The article leaves out the most important part: HOW MUCH DOES IT COST?

Luke

August 24, 2009 3:24 PM

Total me too product. In the BBC report someone from Nokia states that their 'key differentiator' is 'integrated mobile broadband and sim card slot.' (see http://news.bbc.co.uk/1/hi/technology/8219005.stm) Hmm. Last count pretty much every OEM out there had a 3G netbook offering guys!

carldec

August 24, 2009 3:43 PM

If by "punch" you mean fruit juice spiked with enough alcohol that bad ideas are rendered good...

then, yeah. nokia ftw.

Olgo

August 24, 2009 3:54 PM

Olga,

I really don't know how you "beat to the punch" Apple with a lame Windows PC.

Russ

August 24, 2009 8:58 PM

For some actual differentiation, stay tuned until later this year when ARM-based "smartbooks" hit the market with all-day battery life, HD multimedia and built-in cellular connectivity.

For more on smartbooks, check out:

http://smartbookblog.com/

A. bosch

August 24, 2009 8:59 PM

This article is a useless waste of bandwidth (or a free ad for Nokia, Olga?)
There's no indication that there's anything different about Nokia's offering over almost any other netbook maker. Most tech-savvy readers could guess the specs even though they weren't provided. And while the product may come with Windows, I've no idea how you concluded it's "what consumers want" when netbook returns are rampant.

Ted windows

August 24, 2009 9:35 PM

Comes with windoze "that users want"??? You say this in comparison to what-- MS-DOS?

fred

August 24, 2009 9:45 PM

Nokia might be a midget in US market, but for the rest of the world, Nokia really kicks Apple's butt. Also, a lot of people don't want to be ripped off by Apple and its ridiculous hardware and software restrictions.

Robert M

August 24, 2009 10:41 PM

Wow, eleven negative comments by eleven people who haven't even seen a picture of it. Who do they work for?

123zyz

August 24, 2009 11:48 PM

For many, these devices are more than a productivity, entertainement or a communications tool. They are an extension of their personality. The device's look and feel play a big part in a purchase decision, as does how the user feels about having it and all its constituent parts. Nokia's netbook success verses an Apple or other device depend heavily on how well it fills these criterion. It's all basic marketing savvy.

Marty

August 25, 2009 12:48 AM

I own a Macbook and I am not a fan of current netbooks. But I am also a fan of Nokia. If this netbook will actually have a battery-life of 8-10 hours, in addition to the built-in GPS and if Windows 7 proves to be an fast and efficient OS then this could be a hit! I love my Mac but I could see this product to have good potential in the marketplace. It won't replace a real laptop computer with an atom processor but it is enough for most internet browsing and word processing which most people use it for. But the battery-life is a big key.

Mark

August 25, 2009 1:39 AM

I always preferred Nokia products. I was hoping Nokia was going to produce something that I could see without reading glasses that would boot up immediately, do a little surfing, provide me with email, a calendar and my contacts list. In other words, a bigger version of the iPod Touch so it would be kind to these aging eyes.

Harald

August 25, 2009 1:56 AM

No doubt, a nice netbook with its HD-ready screen resolution. 1024 x 600 is no alternative for any serious PC user. 1366 x 768 is resonable although the details might become very small on the screen. But nevertheless a nice and unique feature in the world of netbooks. I can't see effect to Apple. Apple is the star of the future. Steven Jobs knew always that the quality of your OS is decisive. His NEXT OS paved his way back to Apple and MAC OS X is next to Android from Google the only OS in the market with a real growth potential for the masses. That Nokia goes here together with MSFT shows the desparation of these companies. Windows XP was released in 2001. All great new features which were announced originally for Vista did not see the light (e.g. the new file system) and how we all know Vista failed terribly. Now comes with Windows 7 a good update for Vista but where is the innovation compared with XP? Windows is still bulky, not logically structured, uses to much headroom and has a very weak source code basis. Windows insiders know that Windows has no bright future. So where is the punch for Apple? If Apple will come with a netbook sized device we all can be sure that it will be innovative, trendy, sexy and driven by a modern OS. Nokia made the right step but used the wrong OS. Nokia should join Google and not Microsoft but loosers feel probably better while teaming together.

Tony

August 25, 2009 2:07 AM

At least it will let me run what I want, unlike apple's restricted systems. If I want to get MobileMe running fully with my iPhone I need an apple computer, running apple Os, with an apple browser, apple made router and external apple hard disk. Anything else either won't work, is not supported or crashes. Don't start on how apple restricts software, won't release google voice for iPhone or spotify, because it offers competition. If nokia or Microsoft acted like that, fanboys would be in outrage.
So this DOES give me what I want and allows me to do what I want with it. Apple are more interested in wringing the last dollar out of users rather than supporting them!

Mark Smith

August 25, 2009 2:31 AM

Fred how could you suggest that anything outside the US matters? Nokia make fine products but they aren't AMERICAN!!! so they are crap by default.

Nokia will win the US market shortly anyway, all they needs to do is wrap their products up in the star and strips and repeatedly shout USA USA very loudly, it works every time.

Apple on the other hand have a few American fan boys so they own the world. Now lets here no more of it Fred or they will invade and liberate you.

Prodigi

August 25, 2009 2:54 AM

I would have gone for more touchscreen phones and a uber cool update for symbian rather than entering the netbook market with Windows :(

OR

Atleast a netbook with symbian on it. Why the heck windows?

Its going to suck bigtime

mx

August 25, 2009 3:29 AM

idiot reporter, feel bad for him/her

hasando

August 25, 2009 4:54 AM

seriously guys , you are missing the big picture here:
1- the N97 is better than the iphone , the N97 is a "real phone"
2- i agree with fred, in North America people didnt really see what nokia is capable of, if people see what nokia does, trust me Nokia will own This market too
3- this device will be diffrent , keep in mind its the first netbook from Nokia to come
4- good luck Apple , its time to drop the prices !!!

golden

August 25, 2009 5:38 AM

At least for the moment, the "stripped down version of Windows" is what consumers want. (of available offerings) Linux is still a challenge to folks moving from their Windows based desktops for netbooks. Even the easiest, most intuitive, Linux isn't "plug-and-play". Updates are not "one-click". And there is still a "geek-factor" to Linux. OS-X and XP still beat Linux for the "level-1" user. A study by the analyst firm NPD Group has found that more than 90% of netbooks sold in Nov-08, Dec-08, and Jan-09 shipped with Windows on them.

Poonam Kumari

August 25, 2009 7:45 AM

If Nokia provide 7keypad software on netbook , then some users can opt for smaller netbook with 7keypad(16keys +16 otherkeys)instead of bigger Qwerty keypad.

for 7keypad in action vatch videos at:
http://wwww.7keypad.com (Click on S5320)

Lau

August 25, 2009 9:31 AM

Its gonna be a hit in the Philippines coz everthing nokia here is a hit.

from WI

August 25, 2009 10:02 AM

I love the HDMI out but without a DVD player, whats the point. Recent reviews of Windows 7 make this more appealing because it does native what Apple proprietarily eliminates. But Windows 7 would push the availability back to end of October. Are there any 3G carriers that do Data only? Can this booklet make calls without skype? Very interested in what details get released on Sept 2.

OOSA Retard

August 25, 2009 6:35 PM

In my gap year, I went to Europe, Korea and South East Asia.

Before moving out of USA, I thought USA was the most innovative and technologically advanced place. Wrong!!!

Asian countries like Korea and Japan are generations ahead. Nokia and Samsung sells big in the rest of the world. Apple is a relevant name in USA....and it is not likely to make big elsewhere (even in China, despite the rumoured big orders).

Magthor

August 25, 2009 11:07 PM

one word to most of the comments here : apple fanboys
as to Windows being what consumers want, ITS TRUE, just accept it you hermits.

Mace

August 26, 2009 2:05 AM

Don't make any global judgements based on US markets. Nokia is superior global number one in smart phones, mid-range phones, cheap phones and luxury phones. It is also one of the leaders in wireless networks and in maps and navigation.

Apple, RIM, Palm - especially the last two are just peanuts for Nokia.

Americans are just the guys who thought that you absolutely need a 3-ton truck to get your daily 6-pack from your local grocery. Everybody else in the world knew that you don't. And what happened to US auto industry? And still Americans think that best way to pay your bills is to write a check (fyi, rest of the western world have used electronic paymenents for over a decace). I do not trust American public opinion at all. It is unfortunately true that most of the Americans have never visited a foreign country and don't know anything of the life there. When something pops up first time in USA, they think that it was invented there and they were the first. It is quite sad, actually, and will hurt a lot US ecomonomy and culture.

Chris

August 26, 2009 6:40 AM

I'm surprised by some of the comments here, as it is clear they haven't read the press release, but have just invented what they think it is.

1) It looks like Windows 7 from the screenshots, not a cut-down WinXP.
2) "me too" ... I'm not aware of that many netbooks with built-in GPS (or A-GPS which is GPS plus faster fixes as it starts by getting assistance data from local cell towers), or HDMI output.
And only a few have built-in 3G (though dongles are cheap and easily available, I've got one)

It will get more interesting if Nokia get it working well with OVI, as it will bring a sort of iPhone-type application store to a netbook device. Even more interesting if it "Comes With Music".

I too would have liked to see a Symbian device, but as a first step into a market with a machine that sits between the ultra-light netbooks and the sub-notebooks for weight and power, it actually fits my need for a travel machine a lot better than the netbooks I've looked at so far ... price for the machine, and for the data connection, will be key though.

pd

August 27, 2009 2:22 AM

Comes with music would do a world of good. The brand Nokia, will get the money rolling in europe, india and other asia pacific regions for sure. And add to that the well spanned and globally recognised service centres from Nokia, if it serves the 3G booklet, then nothing like it for a customer who looks at personalised support!!!

BuX

August 28, 2009 7:21 PM

TOO HEAVY!!!

Should be 400 g or so and with Mac OS X inside. Hint: Mac Tablet.

Jack Johnson

September 19, 2009 8:34 PM

Mac OS ???? haahahahahahaha

That IS a joke. "Mac Crash"

At least XP is super stable and actually has software available. Mac's crash way too often. I know, you deniers know what I mean. Your willing to put up with an utter POS because you think people think your cool.

Apple's netbook/tablet will fall flat on it's face, if it ever comes out. People won't want something like that, especially something at a price apple will likely try to gouge.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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