Nokia in drive to boost demand

Stockholm. – Nokia Oyj, in its first product introduction since agreeing to sell its handset business to Microsoft Corporation, showed a tablet and smartphones that give a glimpse of how the merged businesses will try to revive demand. The Lumia 2520, Nokia’s first tablet, runs Microsoft’s Windows RT 8.1 software and has a 10.1-inch display. It costs US$499 before taxes and carrier subsidies and will start selling this quarter, initially in the UK, Finland and the US by carriers including AT&T Inc.

Nokia also showed two smartphones with six-inch screens, a category often dubbed phablets. The products expand the Windows mobile-device line-up and signal the type of features that Microsoft will bet on in its hardware push after its first products failed to win over users. Its US$7,2 billion deal for Espoo, Finland-based Nokia’s devices unit, set to be completed next quarter, are part of the company’s plan to challenge Apple Inc. and Samsung Electronics Co.’s dominance of the tablet and smartphone markets.

“Nokia’s phablet brings it and Microsoft into a segment that has high volume and a higher average selling price that previously it hasn’t addressed,” said Richard Windsor, an independent analyst with Radio Free Mobile. “It’s a welcome addition to their line-up.”

Apple was set to show new devices later yesterday, with chief executive officer Tim Cook unveiling a high-definition iPad mini and a thinner iPad at a San Francisco event, people with knowledge of the plans have said.

The Lumia 2520, complementing two new models of Microsoft’s Surface tablet, comes in red and white in a glossy finish and blue and black in a matte finish. The six-inch Lumia 1520, Nokia’s largest smartphone, will compete with Samsung’s 5.7-inch Galaxy Note 3 and comes in yellow, white, black and glossy red. It’ll start selling this quarter for US$749 before taxes and subsidies. The other new smartphone, the Lumia 1320, is US$339.

“We see no obvious stand-out feature that looks likely to persuade large numbers of people who are in the market for a Note 3 to change their minds and choose a Lumia 1520 instead,” John Delaney, an analyst said.

US wireless carrier AT&T said it will sell the Nokia tablet and the Lumia 1520 ahead of the holiday shopping season.
Nokia shares fell 1 percent to 5,24 euros at 12:56pm in Helsinki. They had added 81 percent this year through yesterday, boosted by the Microsoft deal. Microsoft rose 0,1 percent to US$34,99 in New York yesterday and is up 31 percent this year.

Microsoft jumped into the touch-screen tablet market, dominated by Apple’s iPad and models running Google Inc.’s Android software, in June 2012 with the announcement of its first Surface. Designed to keep its Windows software relevant as consumers shift to tablets from personal computers and laptops, the Surface instead generated such little demand that Microsoft said in July it took a US$900 million inventory writedown. – Bloomberg.