Nokia, the world’s leading mobile phone supplier, recently unveiled its own version of a mobile PC — the Nokia Booklet 3G. While most netbooks (or what we call small, light and inexpensive laptops) usually start at $250, Nokia’s offering roughly costs $800. The company says this is because the Booklet 3G is more like a “mini-laptop” than a netbook, with its Atom 1.6GHz processor, 12-hour battery life, 10.1-inch HD display and Windows 7 operating system. "A growing number of people want the computing power of a PC with the full benefits of mobility," says Kai Oistamo, Nokia's EVP for Devices.
Even with the Booklet 3G’s advanced features and potential subsidies from wireless carriers, Nokia’s pricing doesn’t make sense to some analysts. “Nokia is offering a device lacking in features found in other high-end netbooks at a price comparable to medium-end laptops,” says IT and communications expert Tony Bradley in PC World. “What is Nokia thinking?”
Nokia, it seems, is thinking of wooing business users — much like its recent move to bring Windows software to Nokia’s mobile phones [see our previous post on Microsoft and Nokia]. Indeed, while netbooks have grown in popularity due to their portability and low price (they accounted for 22.5 percent of all laptop shipments worldwide in the second quarter of 2009, says market forecaster DisplaySearch), enterprises typically look for something more powerful when it comes to portable PCs.
“Business users want the ability to handle several software packages at once. They want to be able to work in Word, while heading to the cloud (Internet) to input some information into a CRM (customer relationship management software). They need their computers to process graphics. And most importantly, they require security,” says tech columnist Don Reisinger in eWeek. “Netbooks or ultraportables don't provide all those features.”
Nokia’s Booklet 3G, however, seems to fill in these gaps. Aside from running Windows 7 and enabling easy syncing of Nokia smartphones through the pre-installed Nokia Ovi Suite software, the Booklet 3G is equipped with F-Secure Internet Security 2010. It’s a tool that aims to protect the computer from the latest threats without slowing it down.
So can Nokia’s “mini-laptop” find its niche among on-the-go business users or consumers looking for more powerful netbooks, regardless of price? It’s possible, but Nokia will undoubtedly face stiff competition from other suppliers and manufacturers eager to get or increase their share of the market. Sony, for example, just announced a new Vaio X laptop, which includes an 11.1-inch display, Atom processor and built-in 3G networking. The price is yet unknown, but the Vaio X will likely come with Google’s Chrome operating system, as the two companies have recently agreed on an “experimental” partnership, according to The New York Times.
Of course, it’s also possible that while Nokia may have priced itself out of the US market (says tech publications like eWeek and ChannelWeb), it’s really using the Booklet 3G to boost its already significant international reach.
“Selling it in the US would be tons tougher, because of the closed nature of the telecom business here,” says BusinessWeek writer Damian Joseph. “The netbook has its best chance in Europe, where Nokia has better relationships with providers. So let's call this a mini-laptop for white-collar workers who reside in Europe. Nokia's business is about scale, not niche.”
Microsoft and Nokia have teamed-up to offer Microsoft Office software on Nokia’s E-series phones, and eventually on other handsets, starting in 2010. Technically, both compete in the smartphone market with their separate operating systems for mobile devices. Microsoft has its Windows Mobile platform, while Nokia has its Symbian sytems. So why join forces now? Because both are using the move to defend their lead on different fronts.
Nokia’s fight: smartphone dominance. "This is really about creating a formidable challenge for RIM," said Nokia EVP for Devices Kai Öistämö at the official press conference. He’s referring to BlackBerry-maker Research in Motion, which holds 18.7 percent of the smartphone market, according to technology research firm Gartner.
While that’s less than Nokia’s 45 percent market share, the BlackBerry is seen as being favored by businesses, largely due to its emailing and productivity features. In fact, a recent survey of 300 high-end users by investment firm Goldman Sachs (as reported by tech publication ZDNet) found that 57 percent of respondents owned BlackBerries. Of those, 32 percent were subsidized by their companies. By offering Office software on its phones, Nokia hopes to appeal to more business users.
RIM, however, is not the only challenger to Nokia. Gartner also reports that iPhone 3G S sales are a big factor. iPhone sales were the most impressive out of all the smartphones launched in the 2nd quarter of 2009, including Nokia’s N97. It also says Apple had the biggest market share growth in the past year, from 2.8 to 13.3 percent.
Some industry analysts attribute this success to the iPhone App Store, among other factors (see our previous post on App Stores). Indeed, telecoms analyst firm Juniper Research predicts mobile app downloads will approach almost 20 billion per year by 2014. To compete, Nokia launched its own app store, the Ovi Store, in May. The store’s selection, however, is still sparse. The addition of Office software could give Nokia phones the boost it needs among users seeking productivity apps. BlackBerry too has launched its own App Store.
Microsoft’s fight: dominance in communications software. Microsoft Business Division President Stephen Elop says the partnership is part of a strategy to “provide the best productivity experience across the PC, phone and browser.”
Microsoft’s Business Division, which includes Office, has recently reported declining revenues. As Office is a top moneymaker for the company after Windows OS, a lot rides on its continued success. Office, however, faces increased heat from competitors like Google’s free, Web-based productivity apps. “Google's initiative is forcing Microsoft to change its business model,” said Sandeep Aggerwal of the financial advisory group Collins Stewart, in a Dow Jones Newswire interview.
Indeed, Microsoft appears to be covering its bases while it can. Back in July, the company also announced plans to launch free Office Web apps in 2010. Gene Munster, analyst at investment firm Piper Jaffray, thinks it’s a wise move. In an interview with The Wall Street Journal, Munster says making sure people are still using Microsoft products is more important in the short term than risking revenue.
