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Politics : Idea Of The Day -- Ignore unavailable to you. Want to Upgrade?

To: Soumen Barua who wrote (44470)	8/28/2003 3:27:49 AM
From: IQBAL LATIF	Respond to of 50167

Nokia Taps Developing Mkts With Cheap Phones By Robb M. Stewart Of DOW JONES NEWSWIRES. STOCKHOLM (Dow Jones)--Nokia Corp. (NOK), the world's leading mobile phone maker, Wednesday unveiled two new entry-level handsets in a bid to tap into the massive potential of such markets as China, India and Russia. The step is regarded as necessary if the Finnish company is to maintain its dominant market share in the face of sluggish subscriber growth in recent years as the number of people without phones in Western Europe, the U.S. and developed regions of Asia has diminished. "New growth markets will be a key driver of the mobile industry in the coming years," Jorma Ollila, Nokia's chairman and chief executive, said in a statement. "There is extraordinary potential in the number of people currently without mobile service." Indeed, Ollila said that 80% of the increase in global mobile subscribers in the next few years will come from new growth markets. Nokia in June predicted the global base of mobile subscribers would rise to at least 1.6 billion by 2005 and to 2 billion by 2008 from the current 1.2 billion. Mobile services now reach less than 20% of the world's population and some 4 billion people are without telephone service of any kind, Nokia said. "We expect that for an increasing number of these people, a mobile will be their first and only phone, and within a few years there will be a large number of mobile users who have never seen a fixed telephone," Ollila said. In Russia, where Nokia unveiled the new phones, the company expects the number of mobile subscribers to exceed 60 million by 2008, an increase of 200% from the current subscriber base. "The is exactly the right strategy for a company so dependent on volumes and new products for its profitability," said Richard Windsor, analyst at Nomura in London. During the fourth quarter, Nokia said it will introduce the 1100, a basic phone offering voice and text messaging for fast-growing markets such as China, India and Russia. The phone will work on GSM 900/1800 networks. It also will add the 2300 as an "entry-level phone optimized for voice and messaging, as well as fun and personalization." It will include an FM radio, games and polyphonic ring tones. Nokia didn't disclose the suggested retail price for the two new handsets. Company Says New Network Cuts Operator Costs Nomura's Windsor, who has a neutral stance on Nokia shares, said the 1100 and 2300 incorporate many of the feautures that made Nokia's earlier 3100 and 8310 models popular in developed markets. "We think that this will go a long way toward fighting off the competition from local manufacturers in emerging markets and will be central to keeping (Nokia's global market share) at around 40%," he said. The Finnish company's additions to its product range were backed by the launch of a network using its Connect GSM Solution technology. The network, based on the global system for mobile communications standard, will cost mobile operators roughly half as much in capital and operating expenses as a traditional wireless network, Nokia said. Its Connect GSM Solution, it said, will allow operators to reach an untapped market of 600 million potential subscribers with relatively low spending power. The company said the new phones and network should help mobile operators generate reasonable profits from customers even at average revenue per user of $5 or less a month. Smart Communications Inc. (QD-SMA), a subsidiary of Philippine Long Distance Co. (PHI), has begun to set up the new network to extend its coverage to users in rural areas of the Philippines, Nokia said. Smart, it said, has saved up to 40% through the use of the Nokia network technology. Nokia and its competitors are expected to unveil other new phones in the coming weeks, and the Finnish company has said it will have new models on sale by the important Christmas period. Samsung Electronics Co. Ltd. (Q.SSE) this week in Germany launched a line of new GSM-based handsets, the SGH-E700, X600 and X100. News of the new push into growth markets helped lift Nokia shares, already in positive territory, and by 1500 GMT the stock was up EUR0.66, or 4.7%, at EUR14.66, and Helsinki's blue-chip Hex25 was up 1.4%. Company Web site: nokia.com