Struggling Nokia pins hopes on low-cost smartphone

Struggling phonemaker Nokia has unveiled two new handsets it hopes will revive its fortunes.

At the start of the world’s largest mobile phone trade show in Barcelona chief executive Stephen Elop said the phones — a low-price €189 smartphone that runs on Windows software and a handset with a high-resolution 41-megapixel camera — demonstrates “the actions necessary to improve the fortunes of Nokia”.

“With great products for consumers, I think the rest will fall into place,” he said.

Analysts said the smartphone could attract users because of its low price but investors sent Nokia shares down 5%, erasing a big boost it gained on Friday in anticipation of new announcements at the trade show. Nokia has lost its once-dominant position in the global phone market, with handsets running on Google’s Android software and Apple iPhones enjoying booming popularity.

The Finnish company is attempting a comeback with smartphones using Microsoft’s Windows software in what Mr Elop has called a “war of ecosystems”.

“We will accelerate our global reach with new mobile devices and services,” he said.

Malik Saadi, an analyst at Informa Telecoms & Media, said the introduction of Nokia’s Lumia 610 smartphone meant the company was “now one step closer to bringing its [Windows Phone 7] to the entry level smartphone segment” and “clearly shows strong dedication” by Nokia to its Windows strategy and smartphones for the non-US market.

Neil Mawston, a London-based analyst for Strategy Analytics, said Nokia’s new camera phone was impressive — but that markets were expecting more.

“Technologically it is ‘wow’ but they have integrated it into a Symbian phone which is viewed as, rightly or wrongly, yesterday’s technology, whereas I think there was some expectation that it might be in a Windows phone which is tomorrow’s technology,” he said.

The new phones were introduced less than three weeks after Nokia announced plans to stop assembling phones in Europe by the year-end as it shifts production to Asia and to cut another 4,000 jobs. The job cuts follow nearly 10,000 layoffs announced last year.