Struggling Nokia aims high with low-end phone
Bargain-basement handset touted as cash spinner in battle to catch upmarket rivals
Tuesday, 30 April, 2013, 5:32am
The Nokia 105 has been released in some Asian markets.
As Nokia battles to catch Apple and Samsung Electronics in the market for smartphones costing US$500 or more, it's counting on a bare-bones handset that sells for just US$20 to give it an edge.
Priced 97 per cent below the latest iPhone, the Nokia 105 features preloaded games, a colour screen, a radio, a speaking clock and a torch.
The phone, Nokia's cheapest, has been available for a few weeks in India and Indonesia and will soon start selling in Europe.
Even with its bargain-basement price, the 105 is critical to Nokia's entire handset business. Nokia reported on April 18 that it sold about 11 million fewer mobile phones in the first quarter than analysts had projected, with sales of basic phones plunging 21 per cent to 55.8 million units.
A failure to revive the low-end business would leave Nokia without an important source of cash as it seeks to develop challengers to the iPhone and Samsung handsets that run Android.
Falling sales of simpler phones were "definitely worrisome", said Mika Heikkinen, a fund manager at FIM Asset Management in Helsinki."They have to get this under control."
Nokia chief executive Stephen Elop points to the 105 as a signal that the low-end business can recover after a difficult quarter.
While demand for the iPhone and Android devices have made smartphones the fastest-growing part of the market, basic handsets still make up more than half of units sold. That means hundreds of millions of phones each quarter - a market Nokia dominated until Asian manufacturers such as ZTE, Huawei Technologies and Samsung started challenging it morie aggressively.
The Finnish manufacturer says the 105 will be profitable...