Nokia Corporation (ADR) (NYSE:NOK) CEO Stephen Elop sure could use a good pick-me-up. After having a challenging time facing impatient shareholders at the company’s annual meeting in Helsinki, dealing with many disgruntlers about the company’ switch to the Windows Phone operating system by Microsoft Corporation (NASDAQ:MSFT), he sure could use a lift. So why not launch a new device with a new operating platform that is meant to entice the low-income crowd that wants an actual smartphone?
For a company that is struggling mightily in the marketplace, it may seem counterintuitive to revamp the low-price, miniscule-margin phone market with a new device.
However, for Nokia Corporation (ADR) (NYSE:NOK), this new launch isn’t just a revamp; it’s a revolution. Say hello to the first smartphone that is priced for less than $100. In six colors, Nokia launched the Asha 501 Thursday in India, a phone that will run on a new Asha platform and will be an actual smartphone complete with a touchscreen and Internet capability.
Having the launch event in India seems appropriate for Nokia as the company has had reasonably good success in that market, which behind China is the second-largest emerging market in the world, and is one that has a very strong market for the lower-end phones.
An area generally meant for feature phones and few- to no-frills mobile phones. Having a smartphone in this price range can be a huge game-changer for Nokia Corporation (ADR) (NYSE:NOK), which announced that the new smartphone would hit store shelves sometime in June.
The device has several popular smartphone apps already installed like Facebook, Twitter, Foursquare, LinkedIn, LINE, WeChat, ESPN and CNN, among others.
“We’ve seen a tremendous increase in consumer demand for apps for our Asha smartphones, as witnessed by the growth of downloads in Nokia Store,” said Marco Argenti of Nokia Corporation (ADR) (NYSE:NOK) developer experiences. “Consumers expect quality apps at every price point. With the new Asha platform, developers will be incentivized to deliver those quality apps, previously found only on high-end smartphones, thanks to unprecedented volumes and reach opportunities through one distribution channel and a single platform.”
Upon learning of the launch, Neil Mawston of Strategy Analytics said, “Nokia has surpassed expectations of what’s achievable in the sub-100 USD phone category with a new Asha handset that is unlike any other, with design cues from Lumia and a mix of features, services and affordability that is valued by price-conscious buyers. This is a welcome addition to the market and a refreshing option for consumers looking to upgrade from feature phones.”
What are your thoughts about Nokia Corporation (ADR) (NYSE:NOK) and its fray into the $100 smartphone category? Can Nokia pull this off, and will it have any effect on the company in the short- or longer-term? Can this move save Elop’s job, or will it take Tuesday’s product launch in London to set his destiny? Let us know your thoughts in the comments section below.
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