Nokia Internet Compatible Phone A Hit At Cannes Phone Show
By ROD STONE
Dow Jones Newswires
February 24, 1999
STOCKHOLM -- The French Riviera was the setting for Finnish telecommunications firm Oy Nokia (NOKA) to show why it's still well ahead of Swedish rival Telefon AB LM Ericsson (ERICY) in the mobile handset market.
Both companies unveiled a range of new products and services at an industry conference in Cannes this week but Nokia's new internet compatible phone stole the show, analysts said.
The announcements show the Finnish company remains one step ahead of Ericsson, particularly in the expanding mobile handset market, they said.
"The new phone is very good news for Nokia," said Petri Korpineva, a telecoms analyst at Finland's Leonia Bank in Helsinki. He said Nokia is the first of the world's big three manufacturers - the others being Ericsson and Motorola Inc. (MOT) - to offer a phone able to carry internet content.
"Internet compatible phones are definitely going to be a significant market in the longer term," said a telecoms analyst in Stockholm who requested anonymity. "It's a really new product for Nokia, which remains one step ahead of Ericsson," he added.
Nokia's 7110 phone, unveiled Tuesday at the Cannes GSM World Conference, is designed to enable access to internet content and should be available in volume during the second quarter of 1999. The handset has a large display enabling users to read news, weather reports, electronic mail and stock prices, Nokia said.
Anssi Vanjoki, senior vice president, Nokia Mobile Phones, Europe and Africa, said in Cannes that Nokia estimates that 10% to 15% of all mobile phones sold in 2000 will be internet capable. The company also expects annual sales of these "media" phones to exceed the sales of portable computers in the same year.
The Stockholm analyst said Nokia may be slightly optimistic with these forecasts but said a big market is definitely there.
Nokia shares closed up 4.0%, or SEK43.0, at SEK1,125 in Stockholm Tuesday and at 1225 GMT Wednesday were up 1.0%, or SEK11.0, at SEK1,136.0.
Market watchers linked the share price rise largely to Nokia's commitment to start supplying the new phone by the second quarter. By contrast, Ericsson's latest handset, the dual band T-28, which was unveiled last month, isn't expected to be available in volume until the middle of the year.
Korpineva said the T-28, which can operate on both the Global System for Mobile Communication 900 MHz and GSM 1800 digital networks, is competing with Nokia's 6000 series. These were launched around a year ago, he said.
But the Stockholm analyst expects Ericsson to unveil an internet friendly handset in the second half of 1999.
Nokia had sales of roughly EUR8.07 billion from mobile phones in 1998 compared to Ericsson's EUR5.08 billion at its mobile phones and terminals division.
Nokia Handset Based On WAP Technology
Nokia's 7110 is based on the Wireless Application Protocol, a de-facto standard for providing information content to wireless terminals. Nokia said it aims to offer value added services and Tuesday announced that CNN Mobile, a news service developed with CNN Interactive, the internet service of Time Warner Inc. (TWX), will be available over the handset.
"The CNN deal is good but not that significant," said Korpineva.
On Monday, Ericsson unveiled its new R250 PRO, a dual band phone that the company claims is the world's first water, dust and shock resistant mobile. The phone is designed for use by outdoor workers and also has a private mobile radio function to allow group calls using just one number.
Analysts said they do see a market for this type of phone but are uncertain over its potential size.
Nokia and Ericsson also unveiled base stations designed to handle wireless communications inside large public buildings. "These were fairly important announcements but it's not going to be a large market for a considerable amount of time," said the Stockholm telecoms analyst.
Ericsson's RBS 2401 initially supports GSM 900 and 1800 Mhz frequencies while Nokia's can also handle the GSM 1900 MHz frequency as well. Both companies' products are also designed to handle wireless data transmissions.
The GSM World Congress runs until Thursday and both Ericsson and Nokia are expected to unveil more products at next month's CEBIT telecoms conference in Hannover, Germany.
-By Rod Stone; 46 8 545 130 94; rstone@ap.org
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