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Nokia unveils two cheap phones for emerging markets

By Reuters
Thursday, August 25, 2011 8:38 EDT
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NAIROBI (Reuters) – Ailing Nokia Oyj unveiled two cheap cellphone models inspired by consumer needs in Africa, aiming to strengthen its position against low-cost Asian rivals.

Nokia shares have roughly halved this year as the company struggled to keep up with the pace of smartphone development while also losing ground at the cheaper end of the market to Asian brands such as ZTE and G’Five.

The Nokia 101, which comes with slots for two different SIM cards, will be available this quarter for about 25 euros ($35.22), excluding taxes and subsidies, while the Nokia 100 will be available next quarter for about 20 euros.

Nokia’s first dual-SIM model reached the market only last quarter, enabling smaller rivals to benefit from growing demand for such models which are increasingly popular in countries such as India, the world’s second-biggest and fastest-growing market for mobile phones.

The latest models mark the fifth duo-Sim models for Nokia in the last three months and were inspired by the needs of consumers in countries such as Kenya, where mobile phone penetration is more than 50 percent.

Executives at the firm told a media launch in the Kenyan capital that Africa, with its 1 billion people who are mostly young, is a key strategic area.

“We are very focused on emerging markets and our overarching strategy is focus on the next billion consumers, so clearly Africa plays a huge role in that strategy,” Mary McDowell, executive vice president for mobile phones, told Reuters.

McDowell said Nokia’s cheap models would help it sidestep any risks from economic problems, as consumers increasingly rely on their mobile phones to grow their businesses.

“Having affordable devices actually puts us in a good position in a time of economic difficulty. For the consumer the mobile is not just an optional accessory, it is how they are living their life,” McDowell said.

“It is really a lifeline that allows them to prosper economically so it’s not something you can’t live without.”

McDowell expressed confidence in the firm’s product strategy, saying Google’s acquisition of Motorola Mobility was a cause for optimism.

“The Google Motorola announcement really validates our strategy to go with the windows phone as the smart phone platform,” she said, adding that Nokia’s S40 phones, designed to take on cheaper smart phones, were key to the strategy.

“The prediction of the death of feature phones has been a little overrated. Feature phones have gotten a lot smarter. The distinctions are largely technical.”

($1=.7099 Euro)

(Additional reporting by Tarmo Virki in Helsinki; Editing by Yara Bayoumy and David Holmes)

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