Nokia fights back with cheap touchscreen phones

Wed Jun 6, 2012 12:15pm EDT
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By Tarmo Virki and Terhi Kinnunen

HELSINKI (Reuters) - Struggling mobile phone maker Nokia Oyj has unveiled its first full touchscreen phones aimed at the budget end of the market, looking to fill a gap in its product range and catch up with rivals, particularly in emerging markets.

Nokia hopes the three new models will help it to claw back some of the lost ground at its basic phone business, which has tumbled in recent quarters alongside its even deeper problems in its smartphone business.

"Nokia urgently needed these products for emerging markets where rival Samsung has had full-touch, low cost devices like the Star since June 2009. Now Nokia needs to quickly make up lost ground with these new products," Ben Wood, head of research at CCS Insight, said.

Analysts at Strategy Analytics estimate that 105 million such handsets were sold globally last year, with demand particularly strong in emerging markets.

Nokia's basic phone sales fell 16 percent in the first three months of 2012 in part due to lack of touch screen models, and have fallen in four of the last five quarters, while competitors like China's ZTE and Huawei have been growing fast.

Due to this in its last quarter it lost the position of the world's largest volume cellphone maker, after leading the market for 14 years, to Samsung Electronics.

Samsung has also overtaken Nokia and Apple Inc in smartphone sales, where Nokia is trying to regain lost ground with new models using Microsoft software.

So far sales of Windows Phones have been slow to take off, but research firm IDC gave some hope to Nokia on Wednesday forecasting the platform to take No.2 position by 2016 after Google's Android.   Continued...

General view of the Nokia flagship store in Helsinki July 18, 2011. REUTERS/Jussi Helttunen/Lehitikuva