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Nokia Gets into 'Clamshells' for Next Year

http://www.rednova.com/news/display/?id=100372

Nov. 5--Nokia Corp., which had been slow to embrace the folding "clamshell" cellphone, said Thursday that more than half of its new products in 2005 will use clamshell, slide or other designs rather than its traditional "candy-bar" design.

That's a sharp change for Nokia, whose U.S. headquarters are in Irving. It had stuck to the monoblock look long after competitors made clamshells and other innovative designs the core of their product line.

Olli-Pekka Kallasvuo, Nokia executive vice president and general manager of its mobile phone unit, said the new-design phones are expected to bring in nearly 50 percent of Nokia's 2005 revenues, compared to less than 5 percent in early 2004.

At the beginning of the year, Nokia offered only three designs that departed from the traditional design, Mr. Kallasvuo said, and Nokia dropped some market share to competitors.

"We took some relatively aggressive price steps during the spring. I continue to believe that was the right thing to do," he said at a New York meeting in investment analysts.

"By doing so we were able to reverse that development, stabilize that market share, take market share in the third quarter and give a great foundation to continue to build on that," he said.

In 2005, Nokia plans to introduce 40 new mobile devices, with about two-thirds having cameras, more than half having clamshells and other such designs and 50 percent will have MP3 capabilities, company officials said.

Industry wide, Nokia predicted that cellphone sales will increase about 10 percent next year, about half this year's growth rate, with revenues growing slightly less than 10 percent.

Nokia, the world's largest cellphone maker, has struggled with falling revenues in the last two years, and revenues are expected to finish lower in 2004 as well. Last month, Nokia reported lower third-quarter profits despite an increase in revenues.

Albert Lin, an analyst with American Technology Research in San Francisco, said Nokia has to offer clamshells, the second most popular design behind the traditional style, if it hopes to build its market share to its goal of 40 percent.

Motorola Inc., Samsung Electronics and other cellphone makers have benefited by Nokia's unwillingness to offer the other designs, he said.

"I think life's going to much harder for Motorola, Samsung and LG [Electronics] with Nokia now focused on these designs," Mr. Lin said.

Shares of Nokia rose 2.1 percent in New York Stock Exchange trading, finishing up 33 cents to $16.12.