Can the Nokia Booklet 3G Jolt the Netbook Market?

Even as Apple, Microsoft and other traditionally desktop PC-oriented companies expand into the mobile space, a major player in mobile phones is attempting to expand its brand into the PC arena: Nokia plans to launch a mininotebook or netbook called the Booklet 3G at an undisclosed point in the near future. But can Nokia differentiate its product in a marketplace already crowded with offerings from the likes of Hewlett-Packard, Acer, Dell and Lenovo?

On the surface, Nokia's netbook seems reminiscent of other small, cheap notebooks on the market. The Booklet 3G will include a Windows operating system—most likely Windows 7, a version of which will run on netbooks—in addition to a 10.1-inch high-definition display, Intel Atom processor, 12-hour battery life and 3G/HSPA connectivity. Other features: an aluminum shell, Wi-Fi, hot-swappable SIM (Subscriber Identity Module) card functionality, built-in SD card reader and camera, and a weight of roughly 2.2 pounds.

Kai Oistamo, Nokia's executive vice president for devices, suggested in a statement that Nokia's decision to enter the netbook market represents "a natural evolution" for the company:

"A growing number of people want the computing power of a PC with the full benefits of mobility," Oistamo wrote. "Nokia has a long and rich heritage in mobility and with the outstanding battery life, premium design and all-day, always-on connectivity, we will create something quite compelling."

Details about pricing and release dates will come on Sept. 2 at Nokia World.

According to analysts, the Booklet 3G reflects Nokia's focus on extending its offerings within the mobile broadband market—and includes at least one key differentiator from other netbooks already being sold.

"Unlike almost all other netbooks, Nokia's has an internal mobile broadband card with a SIM slot," Ian Fogg, an analyst with Forrester Research, wrote in an Aug. 24 blog post. "Other netbooks rely on external USB mobile broadband modems for Internet access. The presence of this internal wireless model is why the Booklet 3G is a natural extension to Nokia's traditional phone handset product range."

However, Fogg added, Nokia faces distinct challenges in establishing the Booklet 3G within a new product category.

"Nokia now faces new and different competitors for the Booklet that are strong in the laptop PC space such as Dell, HP and Sony that are weak or nonexistent players in mobile phones," Fogg wrote. In addition, Nokia will need to focus on how to best communicate the offering to the marketplace: "The name of this netbook, the 'Booklet,' makes the device sound more like [an] MID or Internet tablet running a custom version of Linux, rather than the contemporary Windows netbook PC."

The netbook space has become increasingly crowded as various manufacturers attempt to capitalize on one of the bright revenue spots in an otherwise moribund PC industry. With the market saturated with cheaper devices, new players have been concentrating on untraditional form factors, more powerful processors and higher price points; if rumors prove correct, for example, Apple's tablet PC will retail for between $500 and $700 and feature a 7- to 10-inch screen.

Although a substantial majority of netbooks currently on the market run Windows, Google plans to port its Android and Chrome operating systems to the devices. In June, Acer announced that it would roll out a netbook with Google Android installed in the third quarter of 2009. On July 7, Google announced that its Chrome OS, a lightweight, Linux-based operating system for netbooks, would be available in late 2010; analysts widely saw the announcement as a shot across the bow to Microsoft and Windows 7.

Nokia's netbook will come installed with Windows. The question will be whether other aspects of the device will be unique enough to make the Booklet 3G seem like an evolution in the eyes of consumers, many of whom may feel that they've already seen everything the market has to offer.