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Nokia's 'bizarre' return to gadgets

Nicola Mawson
By Nicola Mawson, Contributor.
Johannesburg, 20 Nov 2014
Nokia's new N1 Android tablet. (Photograph by Reuters.)
Nokia's new N1 Android tablet. (Photograph by Reuters.)

Nokia's decision to move back into gadgets, only a week after Microsoft dropped the brand from the phones it acquired when it bought Nokia's device unit, is described as a "bizarre" move.

The Finnish company this week introduced a brand-licensed tablet computer, designed to take on Apple's iPad Mini. It also announced plans to launch more devices - eventually returning to making smartphones once its lockup ends in 2016, Reuters reported this week.

World Wide Worx MD Arthur Goldstuck notes it is "very strange" that the networking arm is now moving back into devices after Microsoft dropped the brand. Last week, Microsoft launched the first Lumia that does not carry the Nokia branding, the 5-inch Lumia 535.

Mistaken move

Goldstuck says Nokia must have realised the market is nostalgic for the brand and identified that as an opportunity it can leverage. However, he notes, Nokia could well have made a mistake with its ambitions, because the move sends confusing signals to the market as to what the reconstituted brand represents.

Nokia will find it challenging to succeed at something that is no longer its core business unless it comes up with "spectacularly reinvented handsets," says Goldstuck. "It's not the sharpest strategy we've seen in the handset market."

Nokia's aluminium-cased N1 tablet is due to be in stores in China in the first quarter of next year for an estimated price of $249 before taxes, with sales to other markets to follow, notes Reuters. It runs on Google's Android Lollipop operating software but features Nokia's new Z Launcher intelligent home screen interface.

Apple has the top spot in the tablet market, with 22.8% market share, followed by Samsung with 18.3%, according to the IDC, while Android owns the smartphone market with 84.7% and iOS comes in at 11.7%.

Time to plan

Swift Consulting CEO and tech blogger Liron Segev notes Nokia has time to watch the market until its restraint of trade comes to an end in 2016. This will allow it to research what moves the other manufacturers make, and get a clear picture of which devices emerge as winners.

Segev notes, however, it is "bizarre" that Nokia is now competing with a unit it agreed to sell to Microsoft a year ago. He adds the industry is "incestuous" in this regard, citing the example of top executives moving to companies they once competed with.

However, says Segev, he would not bank on Nokia actually moving back into the handset game totally because much can happen in the fast-moving industry between now and 2016. "I wouldn't buy shares just in case it happens."

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