updated 01:40 pm EDT, Mon May 14, 2007
Nokia on iPhone Price
The iPhone could well push the cost of phones upwards in the US, Nokia CFO Rick Simonson said at a summit on Monday. The executive noted that the already high attention given to the Apple device could change attitudes towards smartphones and other media-savvy devices in the US, where cellphone owners are used to less expensive but also more limited handsets -- a feature that could play into the hands of Nokia, whose line is increasingly reliant on costly media and network connections.
"[Americans haven't] had a lot of choice to go out and purchase these kind of higher-end, feature-rich multimedia devices. If that can help that market grow, I think that gives us an opportunity," Simonson claimed.
The Finnish company's financial officer added that its N95 is a key example of a device where many of the features are already comparable to the iPhone. Its slider design includes both physical and onscreen dedicated media playback, a true GPS mapping function, and a 5-megapixel camera. The phone costs $750 but is "something people will pay for" as with Apple's device, Nokia said.
The CFO was careful to note that his company's reaction to the iPhone would likely involve mutual competition. Apple's strategy would validate Nokia but would likely require some change in what Nokia offers. "Don't get me wrong, they will bring some things to the table that we have to be responsive to," he said. "But we have been investing in this area for some time."
Apple will face a relatively uphill struggle with the iPhone in developing its marketshare. Nokia recently said it would hold roughly 36 percent of the world's cellphone business in the spring, which last year amounted to roughly 1 billion phones. The iPhone is expected to reach just one percent of cellphones with a predicted 10 million units sold by the end of 2008.