Nokia’s big miss: Company’s 5800 touchscreen smartphone launches in U.S. with no carrier support
February 27 2009 - 12:15 pm ET | Phil Carson | RCR Wireless News
Nokia's 5800 touchscreen smartphone features support for 3G networks. It will sell for $400 in the U.S. without carrier support.
Nokia Corp. said today it would offer its mid-tier, touchscreen smartphone — the 5800 XpressMusic — in the United States for $400, with no carrier support.
The news undercut Nokia’s public statements that it has approached the U.S. market with renewed vigor and close collaboration with carriers here, a mantra the company has repeated for more than a year.
Instead, Nokia’s U.S. market share has continued to fall, reaching 8.5% last year, down from 10% the prior year, according to IDC.
That’s a nearly negative 20% growth rate, compared to positive growth rates for the same period of 15.5% for Samsung Electronics Co. Ltd. (now the U.S. market leader), 30.4% for LG Electronics Co., 88.5% for Research In Motion Ltd., 101% for Apple Inc., 36% for Sony Ericsson (another GSM-only vendor) and even the languishing Palm Inc., which grew 18% with only 1.7% of the market.
The news was particularly disturbing for market observers because overall handset growth globally is forecast by Nokia to decline by 10% or more, while smartphone sales are variously forecast to grow in the high single digits to low double digits — the industry’s main bright spot. RBC analyst Mark Sue wrote today in an investor note that he has revised his overall, global forecast downward to negative 18% growth, essentially spotlighting the importance of affordable touchscreen smartphones.
Coincidentally or not, Nokia’s stock on the New York Stock Exchange opened today at $9.34, below its 52-week low of $9.47.
The XpressMusic phone has been positively received by analysts who point out that Nokia’s offering of a mid-tier touchscreen smartphone might be a very competitive offering in such a market. The device offers 8 gigabytes of onboard memory, social networking features such as a “contacts bar” for review of a user’s four favorite contacts and photo-sharing programs, it accommodates VGA-quality video recording and playback, a 3.2 megapixel camera with Carl Zeiss lens and virtual alphanumeric and QWERTY keypads. It will be available at Nokia flagship stores in New York and Chicago, nokiausa.com and independent retailers.
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