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6/22/2007
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Nokia Counterpunches iPhone With E-Phones For U.S.

Nokia says it also has 140 registered value-added resellers authorized to resell the devices to their business customers.

Seeking to counter the tsunami of publicity surrounding this week's launch of the Apple iPhone, Nokia said Monday it has moved up the North American launch of its well-received business-oriented "E" series of smartphones.

Originally rolled out in February at the 3GSM conference in Barcelona, Spain, the three new devices -- the E61i, the E65, and the E90 -- will be available to U.S. companies through "complementary sales channels" (rather than the usual wireless carrier sales venues), including a distribution agreement with Ingram Micro.

Nokia says it also has 140 registered value-added resellers authorized to resell the devices to their business customers.

While the iPhone is seen as mostly a high-end consumer device, Nokia's new smartphones are aimed squarely at the business crowd. David Petts, Nokia's senior VP for enterprise solutions, stresses the E-phones' 3G connectivity and easy back-end integration as two advantages over the iPhone for companies.

"As mobility becomes more and more a business-deployed solution just like in the client-server world, then the integration of applications and interoperation with corporate back-end infrastructure is material," Petts says.

The last few weeks have seen a wave of new devices in advance of the debut of the iPhone, the most ballyhooed launch in mobile-device history. Sony Ericsson two weeks ago unveiled two Walkman phones: the W910 and the W960. Nokia also unveiled three mobile phone handsets last week, in the $200 to $330 segment, where Nokia -- with traditional strengths on the low and high ends -- has been relatively weak.

The new E-phones are decidedly high end, with the sleek E61i, a traditional-looking phone designed for high-speed mobile email, and the slider-phone E65 retailing for around $530 without carrier subsidies. The E90 Communicator, a flip-up ultramobile PC with a larger screen and keyboard, will sell for more than $1,000.

All three devices offer dual-mode capability, operating over cellular GSM networks and Wi-Fi. The dual-mode functions of Nokia's smartphones has been a barrier to U.S. carrier acceptance; when carriers refused to support the original dual-mode E61, Nokia brought out a version called the E62 in this country with the Wi-Fi connection disabled. Nokia marketed the E62 as a BlackBerry rival for the U.S. market, but while competing devices like the BlackBerry Pearl and Motorola Q caught on with users, the E62 didn't. AT&T Wireless last week quietly dropped the E62 from its device lineup.

The E phones are also based on the Symbian operating system, which dominates the worldwide mobile platform market but has yet to make much of a dent in the United States.

The push to bring the full E-series to the U.S. market represents another challenge to the hegemony of the big U.S. wireless carriers, who have so far successfully fended off the sale of "unlocked" phones (i.e., ones not tied at purchase to a specific service provider). Companies purchasing E-phones from Ingram or from resellers will have to add the devices to their current plans, obtain carrier service via their reseller, or use transferable SIM cards.

"For the E-series especially the bulk of sales in the coming months will be more through these new channels than through operators," acknowledges Nokia's Petts. "The E-series is not being ranged or broadly taken to market with the larger operators."

The E-series is Nokia's best chance yet to penetrate the enterprise market in the States, where it has had mixed results at best. Earlier this month the company said that its enterprise net sales climbed in the first quarter of this year in almost every region except the United States. North American device shipments overall were down by 42.5% in the first quarter compared with the same period in 2006.

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