N8 not likely to solve all of Nokia’s problems, analysts believe

New high-end smartphone "will not reduce gap to Apple’s iPhone"

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The Finnish mobile phone giant Nokia will commence the selling of its new smartphone, the N8, towards the end of September. Nokia’s aim is to get the handset on the market for Christmas, and into Asian stores in January for the important Chinese New Year market.
      The phone that was originally shown off in the spring was supposed to be in the shops already before the summer. Because of software issues, however, the company was forced to postpone the N8’s launch into the retail market by some months.
     
According to the normal seasonal variation, Nokia sells more handsets in October-December than in any other quarter.
      Market research companies nevertheless do not believe that the introduction of the N8 will significantly ease Nokia’s problems in the high-end smartphone market.
      According to analyst Neil Mawston from Strategy Analytics, it is all the same the first step into the right direction in enhancing the user-friendliness of the company’s smartphones.
      Carolina Milanesi, a research director with Gartner Inc.’s U.K. unit, agrees:
      “The N8 improves the usability of Nokia’s smartphones, but does not reduce the gap to Apple’s iPhone. Nokia has to rebuild the Symbian operating system completely in order to be able to produce the kind of smartphones wanted by the consumers. The weight of expectations lies with the upcoming platforms, the Symbian 4 and the MeeGo.”
      The Symbian 4 and MeeGo-based smartphones are likely to hit the market in the coming spring.
      According to Milanesi, the N8 also does not help Nokia to stand out from its competitors on the operating system level.
      On the other hand, Milanesi commends the N8 for its design, which, in her view, stands out at least to a certain extent from the touch-screen handsets made by the competitors.
     
During the summer Nokia has repeatedly emphasised how the N8 has been well received by teleoperators.
      If the teleoperators get excited over the handset they can promote it in their own marketing campaigns and in that way boost the demand.
      According to the Strategy Analytics estimate, the N8 handset’s gross profit margin is twice as high as with Nokia’s present smartphones.
      “The N8 is likely to improve Nokia mobile phones’ profitability during Q4 this year, as well as in early 2011”, Mawston says.
     
One of the phone’s important market areas is Western Europe, where according to a rough estimate teleoperators sell around half of all the handsets. To Nokia’s long-standing problems in the North American market, on the other hand, the N8 is not expected to bring very much relief.
      In July, Nokia CEO Olli-Pekka Kallasvuo described the delays with the N8 as “painful”.


Previously in HS International Edition:
  Analysts say that Nokia is unlikely to make Android-powered smartphones (8.9.2010)

See also:
  Nokia´s distress is likely to last a while (18.6.2010)

Links:
  Nokia N8

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