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Has Ericsson Got Nokia in a Color Blind?

Discussion in 'GENERAL Wireless Discussion' started by Kenny, Jan 15, 2002.

  1. Kenny

    Kenny Senior Member
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    By Dan McDonough, Jr.
    Wireless NewsFactor
    January 11, 2002

    Rumor has it that Nokia (NYSE: NOK) is cowering. The world's largest mobile phone maker is shocked, say published reports, by how successful rival Ericsson's (Nasdaq: ERICY) recent launch of its tiny T68 has been. Part of the allure of Ericsson's new handset is in its color screen.

    Now, some analysts are convinced that Nokia is planning its own color-screen handset -- an update of its 8310 model.

    The 8310 is a GSM (global system for mobile communications) phone that works on networks in Europe and Asia. It also handles data services using WAP (wireless application protocol) over GPRS (general packet radio service) networks. And, if the rumors are correct, a color-screen version could give Ericsson's T68 a run for its money.

    Simple Pleasures

    Though Yankee Group analyst Sarah Kim has not yet heard of any Nokia color-screen plans in the works, she is not sure why the company would make a serious investment in such a product.

    "At most, you're looking at two or so years for this product," Kim told Wireless NewsFactor. She said the type of people who would be interested in a color-screen GPRS phone would be the first to drop the handset for new 3G (third generation) handsets and services once they become available.

    The T68's popularity came unexpectedly. When Wireless NewsFactor published a list of wireless gift suggestions in December, the T68 was touted by one analyst as the top item on his list. The T68 also was voted one of the "100 best things in life" by GQ magazine in the United Kingdom.

    "But it's very expensive," Kim noted. In fact, the price tag is more than US$500.

    Waiting for Next-Generation

    Nokia has set serious goals to maintain and grow its already dominant market share. If Ericsson gains significant attention from the T68, it could throw a monkey wrench into Nokia's plans. So, Nokia's main objective for a color-screen 2.5G phone likely would be to steal Ericsson's thunder. If Nokia can offer a color-screen model at a lower price, it will be able to compete with Ericsson, despite coming late to the game.

    But color itself is not novel. Besides the three-color display Motorola toyed with for a couple of its phones, Kim noted that the Sanyo 5150 from Sprint and the Samsung SPH 1300 Palm phone offer color and already are available in the United States.

    The T68 and Nokia's 8310 models are GSM phones that are available only outside the United States.

    Nokia's biggest challenge -- if it comes through with a 2.5G color phone in the next year -- will be explaining to consumers why they shouldn't just wait for 3G.
     
  2. KevinJames

    KevinJames WA's 1st retired mod
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  3. Kenny

    Kenny Senior Member
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    ok

    Yes but the Nokia 7650 does not exist yet in the eyes of the consumer...it's not available yet and won't be until maybe another 6 months. Also you don't expect the Nokia 7650 to compete with the Ericsson T68 do you? The 7650 is an Integrated Digital Camera/Multi-media Messaging system and a somewhat large/bulky cell phone. The point was that Nokia was taken by surprise in the success of Ericsson's tiny color T68 and Nokia doesn't have one available as of now to compete, but they will try to squeeze in a color version of the 8310 before the 7650 is released.

    Nokia to Launch Small Color Phone Soon - Reports
    By Paul de Bendern

    HELSINKI (Reuters) - Nokia (news - web sites), the world's largest mobile phone maker, is expected to unveil by March a color screen mobile phone to match an unexpectedly successful rival model from Ericsson (news - web sites), analysts said on Thursday.

    ``A couple of industry contacts tell us a color display version of the new 8310 phone is being developed by Nokia,'' said Peter Richardson, analyst at SoundView Technology Group.

    ``We expect an announcement quite soon,'' he told Reuters, adding sources said Nokia planned to start selling the device early in the second quarter.

    Nokia spokesman Tapio Hedman declined to comment.

    Several analysts Reuters spoke to have said they expect the Finnish company to plug a hole in its portfolio by unveiling a small color screen device at its quarterly results release on January 24, at the telecoms conference in Cannes in February or at the CeBIT show in Hanover in March.

    Nokia -- known in the past for its skill in forecasting consumer trends -- was taken off guard by the immediate success of the Internet-enabled, tiny Ericsson T68 model, which came to the market late last year, industry experts say.

    The T68 was the first color screen cellphone for the European market.

    ``There is a gap in Nokia's portfolio. They've been shaken by the strength in demand for the T68,'' Richardson said.

    Ericsson, the Swedish telecoms equipment maker, has since October 1 merged its mobile phone division with Japan's consumer electronics group Sony Corp (news - web sites) to create Sony Ericsson Mobile Communications.

    Nokia holds around one third of the global market for cellphones, more than double its nearest rival Motorola. Total cellphones sales are expected to have been around 400 million units in 2001, some five percent below 2000 sales.

    The industry has been hit by a global economic slowdown, operators' reluctance to subsidize phones to win new customers and the lack of attractive new services to stimulate demand.

    Nokia has already announced one color screen phone, a digital camera phone called 7650, which will be on the market by the middle of this year, but it will be bulky and expensive and is an unlikely competitor to the small Ericsson T68.

    Analysts believe Nokia's new color-screen phone, which will be squeezed into the product line before the 7650 model comes out, will be similar to the tiny 8310 monochrome screen model.

    It is a recently introduced model that caters for the high-end consumer segment. It offers GPRS access and has an in-built FM radio and changeable covers.

    GPRS, or General Packet Radio Services, allows users to get quick and constant Internet access, particularly in Europe.

    ``We think this product... addresses concerns that the 7650 will be too costly and too large to compete against slicker models like the T68,'' SoundView Technologies, which has a ''strong buy'' on Nokia, said in a research note.

    Color screens have become a huge success in Japan, the most advanced mobile Internet country, and their popularity is expected to grow in Europe partly because a color display makes it more attractive to play games and use other functions, according to analysts
     
  4. KevinJames

    KevinJames WA's 1st retired mod
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    my apologies

    Hi Kenny,

    I didn't realize you felt so strongly about it. I have nothing against the Ericsson phone you cite. From what i've been hearing from new users lately, they actually like the new Ericsson phones. I was just wondering if you (and our fellow readers) knew about the Nokia color phone. It almost sounded like you didn't.

    Do I expect the Nokia phone to compete with the Ericsson? By all means, "No."

    (I expect it to blow Ericsson out of the water! Just kidding.)
     
  5. KevinJames

    KevinJames WA's 1st retired mod
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    Nokia Color, model# un-named

    A colour version of the successful high-end 8310 phone is currently being developed by Nokia with intent to release mid 2002.

    The move has apparently been brought forward due to the apparent market gap created between the launch of the low end 33x series and the arrival of the high end gprs/MMS colour 7650 which will be available end of 2002. It appears Ericsson has found favour in the Nokia activity lull with the launch of its Bluetooth ™/gprs series inc. T68 which have occupied the high end renewal market.

    Originally a more pared down version of the 7650 was planned but it seems that Nokia have decided to scrap that idea and head back to the drawing board with a competitive product to head off Sony Ericsson's challenge.

    From: http://www.wirelessworldforum.com/w2fnews11400.html
     

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