NEW YORK (Reuters) – Nokia aims to regain popularity among U.S. consumers with advanced devices and retail stores, but the world’s No. 1 cellphone maker may need a revamp of its devices to dent the lead of Motorola Inc., analysts said.
Finland’s Nokia plans to follow the opening of New York and Chicago stores this past summer with the launch of advanced phones and services at an event in New York on Tuesday.
Both moves aim at creating a buzz around its brand and encouraging consumers to depend on cell phones for new services accessing information and entertainment.
This could help Nokia, which has lost ground to the success of Schaumburg, Illinois,-based Motorola’s popular slim Razr flip phone. But Nokia’s decision to pull back from making phones based on CDMA, the most popular U.S. mobile technology, makes some analysts question its ability to raise its U.S. profile.
“They will continue to suffer until they remedy the situation. That is, get back into CDMA or put out slimline phones or flip phones that can compete with Motorola or Samsung,” said Charter Equity Research analyst Ed Snyder.
Nokia said it would continue to have a CDMA strategy in North America but would stop making those phones itself. It is known for its candy-bar shaped phones, though cell phones with flip-open covers are hugely popular with U.S. consumers.
Nokia had a 13 percent share of the U.S. market in the second quarter, well below Motorola’s 44 percent share and trailing a 16 percent share for Samsung Electronics Co., according to research firm Strategy Analytics. That marks a steep drop from the 32 percent market share Nokia commanded in 2001, when Motorola had a 20 percent share.
A “very cool” music phone?
Suggestions vary from a wider choice of cell phone software to creating stronger links with U.S. mobile service providers who are also the main retailers of such devices. But the top item on analysts’ wish list is a better phone lineup.
“Carriers continue to differentiate on devices,” said Yankee Group analyst John Jackson. The biggest U.S. provider Cingular Wireless, the first U.S. service to sell Motorola’s Razr, famously saw a strong boost to its growth as a result.
“If Nokia can (also) make Cingular more competitive, that’s enough to boost its share and propel the brand back toward relevance,” said Jackson. Cingular, a venture of AT&T Inc. and BellSouth Corp., uses GSM, the wireless technology that drives the vast majority of Nokia’s global phone sales.
But given that Motorola and Samsung have a lead on slim phones and flip phones, Nokia may need to come up with something totally different in order to turn heads.
“The only other thing they could possibly do is to put out a very cool music phone,” said Charter’s Snyder.
As they push to boost their own revenue in the face of falling phone call prices, cell phone providers are investing billions of dollars in high-speed wireless networks that can support new services such as video and music downloads.
Snyder sees a stylish music phone as Nokia’s best chance for a blockbuster product as consumers are already accustomed to listening to music on devices like Apple Computer Inc.’s iPod.
Outlook4Mobility analyst Andy Seybold believes Nokia will come out with several new advanced devices for the U.S. market before year’s end, including phones that run popular software from rivals such as Microsoft Corp., PalmSource or Research In Motion Ltd.
Nokia’s advanced phones currently run mostly on software from UK-based Symbian, in which Nokia owns a major stake.
Seybold sees a wider software choice and Nokia’s plan to launch an additional two U.S. flagship stores outside of New York and Chicago as risks that could pay off.
“Just because you slip, it doesn’t mean you can’t come back with a vengeance. Motorola has already proved that,” he said.
Fuente: Reuters, Sinead Carew