Is the N900 the Final Element of a Nokia Comeback?

Nokia introduced its first Linux-based phone on Aug. 27, the robust N900 smartphone. It features a 600MHz ARM processor, an iPhone-size high-definition touch-screen, up to 48GB of storage and an open-source, Linux-based operating system called Maemo.
The N900, which will join us some time in October and retail in the neighborhood of $700, followed on the heels of Nokia’s announcement that it will “bring its rich mobility heritage and knowledge to the PC world” with an Intel Atom-powered, Windows-operating netbook called the Booklet 3G.
These followed the June debut of Nokia’s flagship N97, a device the company’s tempted to call a smartphone, though Nokia prefers “mobile computer.” It runs the Symbian S60 5th edition operating system.
Three instances make a trend, as any magazine editor will attest, but for Nokia-the world’s largest handset maker, which of late has seen market share slip, as well as average selling prices fall faster than the industry average-do they constitute a comeback? Or at least the necessary elements to lead to one?
“The N900 QWERTY phone and Booklet netbook are useful steps in the right direction for Nokia,” analyst Neil Mawston, with Strategy Analytics, told eWEEK.
“Nokia needs to regain share among high-end consumers in rich countries, and launching feature-packed 3G devices is one way of doing that,” said Mawston, adding that it’s only half the solution.
“The other half will be to build closer relationships with operators in major countries worldwide where it is currently under-represented, such as the U.S.A., Japan and South Korea,” he explained.
Analyst Ken Hyers, with Technology Business Research, sees the devices as a means toward future success.
“Today’s netbooks are little more than underpowered laptops, but Nokia’s vision is to make a separate class of devices that are more capable of performing mobile computing tasks,” Hyers told eWEEK. “I think that the N900 is part of Nokia’s strategy to establish a beachhead in the mobile computing space.”
Pricing, however, is likely to prevent either from registering with the majority of consumers today, Hyers said, but that may be fine.
“I think Nokia is taking the long view with these devices, devoting the time and effort now to develop these so that by the time the mass market catches up to it, Nokia will have these classes of devices really well-tuned.”
In June 2008, Nokia purchased Qt Software, now known as the Qt Development Frameworks. In a recent research note, Hyers described Qt as being “widely used for developing in Linux, the Mac OS X, Windows and Windows CE. Applications developed for these platforms are more easily ported to platforms that also support Qt, enabling developers to create an application once and deploy it across multiple platforms with minimal changes.”
Reuters reports that Goldman Sachs expects Nokia’s value share for $350-plus phones to fall to 13 percent this year, from 33 percent two years ago, and eQBank analyst Jari Hondo told Reuters: “Maemo’s got to be the best bet Nokia has in that battle.”
TBR’s Hyers told eWEEK that Nokia “is betting that by focusing more on open-source platforms and eliminating barriers to development, a greater number of developers will choose to create applications for its devices, allowing the company to better compete with other smartphone platforms.”
Analyst Roger Kay, with Endpoint Technologies, objected to the term “comeback.” “What they need is to regain momentum,” he told eWEEK, saying that in the United States we have a less clear picture of Nokia, which is far stronger and more dominant in Europe.
“I’m not sure if these new categories are actually the winners, but I think it’s good for Nokia to be experimenting like this and putting out new products and taking risks. … If they don’t do anything, they can be assured of a decline,” he said.
“That’s really the way to go: take a higher-risk stance and try to shake some life into the company, get it moving.”
Nokia did not respond in time to a request for comment.