Nokia’s first touchscreen to face stiff Q4 competition: 5800 XpressMusic to feature Comes With Music, arriving in U.S. next year

After months of hinting at the device, the world’s largest handset maker unveiled its answer to Apple Inc.’s iPhone with the inspiringly named 5800 XpressMusic. The Nokia Corp. gadget features a touchscreen and, starting next year, will ship with the company’s Comes With Music service.
Per the company’s modus operandi, Nokia did not name the carriers to sell the device, but said it carries a $386, unsubsidized price tag. Thus, according to research firm Global Insight, operators may well subsidize the phone down to $50 or lower- well below the iPhone’s current $200 price tag.
Nokia said its 5800 will be released “worldwide” in the critical fourth quarter holiday shopping season, though investment banking firm UBS said the only markets that will actually get the phone in that quarter will be India, Russia and Spain. Further, Nokia said its Comes With Music service would not ship with the device until next year.
As for North America, Nokia said the device won’t hit store shelves here until the “first half” of next year.
As expected, the 5800 features a range of advanced features and functions, including 8 gigabytes of internal memory, a 3.2 megapixel camera and surround-sound speakers. It runs Nokia’s S60 smartphone operating system, based on the Symbian platform.
A busy playground
The announcement puts the world’s largest handset maker squarely into the touchscreen battleground, which was laid out more than a year ago by Apple’s iPhone. A variety of players, from LG Electronics Co. Ltd. to Samsung Electronics Co. Ltd. to HTC Corp., have leapt into the touchscreen arena in hopes of cashing in on the craze. Indeed, BlackBerry maker Research In Motion Ltd. is gearing to release its touchscreen Storm device through Verizon Wireless, although the companies have not announced a launch date.
Thus, the upcoming holiday shopping season should be rife with touchscreen showdowns. It’s unclear whether Nokia’s effort will outpace rivals, but it will certainly benefit from Nokia’s unassailable position in the mobile-phone market; the company currently commands a 40% global share, more than double that of its nearest competitor.
Nevertheless, Nokia’s latest effort faces challenges. The company’s power comes from the low end of the phone spectrum, where volumes are huge and features simple. In the smartphone arena, Nokia’s market share stood at as 47% at the end of the second quarter, according to Gartner, down from 51% in the second quarter of 2007. Meanwhile, RIM’s share has grown from 9% to around 17% during the same period.
And in the United States, the iPhone’s testing ground, Nokia is a second-stringer. According to Strategy Analytics, Nokia commanded only 10% of the U.S. market in the second quarter, though that number improved dramatically from the 5% market share Nokia owned in the first quarter.
Comes With Music to the rescue
Based on how Nokia introduced its first touchscreen phone – by putting almost as much emphasis on Comes With Music as the phone itself – the company appears to be placing its hopes on the unlimited music program as a way to counteract touchscreen competition in general and Apple’s iTunes service specifically.
“Delivering on Nokia’s vision to provide the best total music experience possible, the Nokia 5800 XpressMusic will be among the first devices to support Comes With Music, Nokia’s groundbreaking service which offers one year of unlimited access to the entire Nokia Music Store catalogue,” Nokia said.
Nokia said U.K. shoppers will be the first to test Comes With Music when it launches there on Oct. 16. According to Reuters, Comes With Music is set to hit the United States next year.
However, Nokia’s effort may face challenges from carriers, according to Peter Boyland at Global Insight, as Comes With Music could eat into carrier’s own mobile music efforts. Indeed, according to a report in the Financial Times, the U.K.’s four largest cellphone carriers are not planning to sell Comes With Music.
Despite such challenges, Global Insight’s Boyland believes Nokia’s touchscreen device and music-focused approach will be enough to stand against – and perhaps even topple – Apple’s iPhone effort.
“Apple has been heavily criticized for attempts at ring-fencing revenue and a closed view of the market, and Nokia’s challenge to its flagship handheld product could very well bring about Apple’s downfall in the mobile space,” Boyland wrote in a research note.
As for the 5800’s touchscreen, Nokia said it will allow users to have “direct access” to music and entertainment via a drop-down menu, as well as quick access to the Internet (the 5800’s Web browser also supports Flash technology). The phone also includes a touchscreen keyboard and a stylus, as well as a “Contacts Bar” that Nokia said allows users to highlight four favorite contacts and track the history of recent text messages, e-mails, phone logs, photos and blog updates.
However, according to the Wall Street Journal, Nokia’s touchscreen supports only one touch point at a time, unlike Apple’s iPhone that allows users to zoom in and out with two fingers.