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Little buzz for Nokia's new cell phones

Nokia will unveil its first mainstream flip phone next week, but industry observers say the company's new handsets are unlikely to inspire the ardor needed to claw back market share.
/ Source: Reuters

Nokia will unveil its first mainstream flip phone and a music player next week, but industry observers said on Thursday the products would not inspire the ardor needed to claw back market share.

The world's top mobile phone maker plans events at its headquarters in Helsinki and in Asia, where it is expected to launch one or two fold-away phones, a music player without a phone keypad, a lightweight communicator model for business users and a small handset for third-generation wireless networks, mobile phone industry sources told Reuters.

But one industry source who has seen the new handsets said he did not expect any of them to set the industry on fire.

"The mobile operators want something from Nokia that really smokes. This isn't it," he said. One clamshell has a swivelling display, a feature already used by South Korea's Samsung Electronics and LG Electronics.

New phone models are crucial to plug the holes in Nokia's product portfolio. Rivals have been faster to market with handsets boasting high-resolution displays, cameras and other features that have helped them encroach on its territory.

Nokia's market share plummeted to 28.9 percent in the first quarter of 2004 from 34.6 percent in the year-ago period, according to research group Gartner.

The company has admitted it underestimated demand for the clamshell models that have become very popular with consumers, and said it would take until the fourth quarter to revamp its line-up.

At the same event one year ago, Nokia was dismissive of fold-away models, saying they were becoming commodities and that it would balk at bringing out "another silver clamshell". It has since launched one expensive flip phone in an exotic casing.

Analyst Matt Hoffmann at Schwab Soundview Capital Markets said in a research note he had talked to Nokia executives in China last week who told him several mainstream clamshell phones would be introduced at next week's events.

"(But) we believe Nokia does not have a product 'magic bullet' that will help them materially before the fourth quarter of 2004," he said.

A Nokia spokesman in Helsinki declined to comment on the phone launches but, in an invitation to a Nokia event in Asia, the company said Singapore would be the first place it will launch its latest phones, including one that works on third-generation (3G) networks.

It was not clear if the phone, designed for fast mobile data communications, was capable of making live video calls, a feature lacking on Nokia's current 3G models but offered by its rivals.

Nokia is also expected to show off its third attempt at a music phone, this time in a model that has no traditional phone keypad and, for the first time, will play many different audio formats that can be downloaded from computers or the Internet.