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Nokia gloomy about N-Gage

Nokia said Wednesday it is unhappy with the sales of its N-Gage gaming device and will bring the games to other phones to get enough scale.
/ Source: Reuters

The world's biggest mobile phone maker, Nokia, said on Wednesday it is unhappy with the sales of its N-Gage gaming device and will bring the games to other phones to get enough scale.

Nokia offered N-Gage to consumers in 2002, in a portable gaming market which was then dominated by the GameBoy from Nintendo of Japan, vowing to sell 6 million units in the first three years. It only managed to sell 2 million.

"I am not happy. I said we needed to sell six million in three years, and we sold one-third of that. We need to make some changes," said Anssi Vanjoki, head of Nokia's Multimedia division, which produces N-Gage.

He said Nokia will now bring the games that were developed for N-Gage to the new N-series phones it launched earlier this year. The Finnish mobile company announced three new models in the series earlier on Wednesday, bringing the total to six.

The move would boost the potential market for the games, a key factor for developers who need to choose which device offers the best chance for sales of their games software.

Nintendo and Nokia have seen formidable new competition from Sony's new PlayStation Portable (PSP). Sony expects to have shipped 13 million PSPs in its fiscal year to March 2006.

Vanjoki did not want to specify how many N-series devices he expects to sell in the next year, but said the market potential is much bigger than just the portable games devices segment.

Nokia's Chief Executive Jorma Ollila said earlier on Wednesday he expects the world market for smartphones to double next year to 100 million units and market researcher Canalys measured sales of 13 million units in the third quarter of 2005. Nokia had 55 percent of that market.

The N-series mobiles are all smartphones, running on the Series 60 software developed by Symbian and Nokia, as does N-Gage.

Vanjoki said N-Gage would not be sacrificed in the process and that the device remained key to Nokia's strategy. It was launched as part of Nokia's search for new growth outside its core of straightforward voice mobile phones.

So far, Nokia has two N-series products on sale, the N70 and N90, with the N91 expected on the market in the first quarter of 2006.

Demand for the N90, which has a high quality video and still camera, was so big that Nokia could not meet initial demand when it went on sale in August, Vanjoki said.

"In the beginning demand far exceeded supply. N90 exceeded the expectations we had. We had to increase capacity. Now we are meeting demand."

He declined to give sales numbers but added the N90 would be on sale in North America before Christmas.

The N-series phones, retailing at 400 euros ($480) or more, are aimed at the top 200 million consumers around the world -- out of a current total of 2 billion mobile phone users.