October 22, 2013 3:14 pm

Nokia catches up with rivals with tablet and cheaper phone

Stephen Elop took to the stage at the final Nokia World convention on Tuesday to somewhat muted applause, with the knowledge that it would be the company’s last seeming to hang over the once blockbuster annual celebration.

The former Nokia chief executive himself will soon be rejoining Microsoft, which has agreed to acquire Nokia’s handset business for $7.1bn. This means that next year, Mr Elop could well be bringing his trademark Canadian enthusiasm to a very similar presentation at a Microsoft event.

The irony was not lost on analysts, who noted that Nokia was at last fixing some of the issues that had hampered its smartphone ambitions.

Nokia finally produced a tablet and supersized “phablet” phones to match similar products already well established by its rivals, alongside a cheaper Asha range of phones designed to be the entry level smartphone for emerging markets customers.

As importantly for many users, the company has signed up applications for the Windows platform that are popular with users, such as Instagram, Vine and Flipboard.

The launch of these devices into an already crowded market highlights how much slower Nokia has been to move on key products than its rivals, exacerbating its steep decline from being the world’s leading handset maker.

The Finnish handset maker missed out on the early smartphone boom, ceding ground to Apple and Google. It accounts for just 3 per cent of smartphone sales globally.

And not for the first time, the excitement surrounding its first tablet, a premium priced Lumia device with a 4G connection will be cut short by rivals. The launch on Tuesday of Apple’s latest iPad is likely to snatch the headlines from its Finnish rival once again.

Even so, analysts said that Nokia has finally added the breadth of products to match rivals. Experts applauded features in the new devices, with a keenly priced Lumia tablet with a 4G connection set to become a flagship device for the division being sold to Microsoft.

Thomas Husson, analyst at Forrester, said it was “a strong line-up of products”, even if he noted the “considerable challenge” in convincing customers away from the dominant smartphone makers such as Apple and Samsung.

Mr Elop said Lumia and Asha smartphones had grown quarter on quarter in volume in the third quarter of 2013. “Now more than ever, mobile devices are at the centre of consumers’ lives as they look to capture, curate and share experiences on the go,” he added.

Nokia hopes that it has made a difference to its sleekly shaped and colourful range of tablets by adding greater connectivity with 4G capability and ability to easily share data with its smartphones.

Nokia will also benefit from its access to Microsoft’s Office suite of applications, such as Excel and Word, with a keyboard offered as part of the screen cover.

Mr Elop highlighted an intention to “shift” usage of tablets from just entertainment or web browsing to becoming a device for work.

However, the launch of the Nokia tablet sits uneasily with the range of similar devices already sold by its future owner, according to analysts.

Mr Husson said that “despite a more affordable price, the respective positioning of Nokia’s new tablet versus the Surface 2 is not obvious and will have to be dealt with post Nokia’s acquisition”.

Geoff Blaber, analyst at CCS Insight, said the potential overlap between the two tablet models is a “perfect example of the integration issues Nokia and Microsoft will face”.

The launch of the tablet has been on the cards for almost as long as the possible acquisition by Microsoft, however. At Mobile World Congress this year in Barcelona, Mr Elop was holed up for much of the conference in a small room tucked inside the vast section of a hangar commandeered by Nokia to show off its devices.

He hinted then at the possibility of a tablet device that would put Nokia in competition with the Surface that had recently been launched by Microsoft. Nokia was “learning” from its US partner, he said.

Nokia was learning from Microsoft about much more than just a rival tablet launch. It was there that Risto Siilasmaa, Nokia’s chairman, was continuing the nascent discussions with Steve Ballmer, Microsoft’s chief executive, to sell the whole business.

Nine months later, Nokia has finally produced its tablet, but too late to benefit much from the innovation. Microsoft stands to gain in the longer term from any new customers that are persuaded by the broader range of handsets and accessories set to launch before the end of the year.

These were “big Nokia launches”, said Ian Fogg, analyst at IHS, but for “Microsoft’s mobile future”.

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