InterDigital Inc (IDCC)

[nieves]

Nokia Makes Plans to Jump into US Market with New Selection of Mobile



Mar 23, 2003 (Sunday Business - Knight Ridder/Tribune Business News via COMTEX) -- Nokia launched a new range of mobile phones last week designed to take the US market by storm. But the Finnish mobile giant has big hurdles to jump.

The US differs from Europe in several key respects: free or very cheap local fixed-line calls in the US make consumers reluctant to switch to mobile phone; the industry initially made the mistake of charging users for incoming calls on their mobile phones; and widespread personal computer ownership made e-mail so pervasive that text-messaging, nicknamed "the poor-man's e-mail" in Europe, never really took off in the US.

Nokia's biggest hurdle is the fact that the US uses four incompatible digital networks as opposed to Europe's single GSM network, meaning that Nokia's European handsets have to be drastically modified for the US. The fastest growing of the US's digital networks, CDMA, is where Nokia is weakest.

Although Nokia sells 38 percent of the world's mobile phones, its strength is in the other networks, particularly the pan-European GSM standard. Some of Nokia's new CDMA phones unveiled in New Orleans last week resemble the company's European GSM phones while others have flip-open cover design favoured by rival manufacturers.

The company is confident the new range is strong enough to grow its CDMA market share from 10 percent-15 percent by the end of 2003.

But Nomura telecoms equipment analyst Richard Windsor believes Nokia's forecast may be over-optimistic. He believes Nokia made a fundamental strategic error by deciding to make its own chipsets for the latest generation of CDMA, rather than opting for Qualcomm chipsets, the industry standard, which may make handsets bulkier.

Rival handset maker Samsung stole much of Nokia's thunder in the US last week by announcing plans to use Qualcomm's latest chipsets to produce handsets capable of roaming between the previously conflicting US CDMA network and Europe's GSM network, which also operates in some US regions.

How it overcomes the hurdles of the US market will be crucial to Nokia's long-term future. The world's richest consumer market, the US, lags behind Europe in mobile phone usage by several years.
To see more of Sunday Business, or to subscribe to the newspaper, go to
http://www.sundaybusiness.co.uk
UKpound preceding a numeral refers to the United Kingdom's pound sterling.(c) 2003, Sunday Business, London. Distributed by Knight Ridder/Tribune Business
News.

-0