Nokia to announce its first ever Android phone
Nokia, soon to be acquired by Microsoft Corp, is turning to software created by arch-rival Google for a new line of phones it hopes will make it a late contender in the dynamic low-cost smartphone market.
Its first models, Nokia X, X+ and XL, rely upon an open version of the Android mobile software system created by Google that has become the world's most popular software used in smartphones.
The release of the phones just days before Nokia sells its handset business to Microsoft in a $7.2 billion deal, is an attempt to stay relevant in emerging markets, where low-cost Android phones are being snapped up by hundreds of millions of buyers.
Nokia Chief Executive Stephen Elop said the market had "shifted dramatically", and the group needed to address a sub-$100 segment that is set to grow four times faster than more expensive phones.
He told a crowded press conference at the Mobile World Congress trade fair in Barcelona that rather than being an 180-degree turn in its strategy of using Microsoft's Windows Phone for smartphones, it was a move that introduces the "next billion" users to Nokia's hardware and Microsoft's services.
"We see the X family being complementary to (Windows Phone) Lumia at lower price points," he said. "Even as you see Lumia push lower and lower, you will see us push lower with Nokia X below that."
But the strategy shift underlines the many missteps made by the Finnish company since Apple launched its ground-breaking iPhone in 2007.
Nokia was caught between a rock and a hard place - committed to using Microsoft's Windows Phone software but needing Android software to reach more cost-sensitive customers, CCS Insight's head of research Ben Wood said.
"That a company soon-to-be owned by Microsoft, the creator of the original operating system, is moving to Android is almost an "admission of failure", he said.
Global smartphone shipments grew 41 percent annually to reach nearly 1 billion units in 2013, according to market research firm Strategy Analytics. Android phones from dozens of handset makers accounted for almost four out of every five smartphones sold, or 781.2 million units.
In the past year, Apple shipped 153.4 million smartphones worldwide for a 15 percent share of the market, making it the second largest smartphone platform after Android.
Microsoft was a distant third in market-share terms, shipping 35.7 million units worldwide with its Windows mobile software platform, but still struggling to gain traction in the low-tier and premium-tier smartphone categories, Strategy Analytics said.
The open version of Android software means that the new Nokia phone does not have rely on Google's services and access to the Google Play app store. Instead, Nokia is bundling it with its own music and map offers, and Microsoft's email, cloud, messaging and search services.
Apps will be available in Nokia's own app store, as well as a host of other app stores, Elop said.
The look of the Nokia X devices is starkly different from the usual Android phone, with nods to Lumia and Asha interfaces.
Elop said rather than confusing customers, Nokia X - where X indicates a cross between Nokia hardware, Android apps and Microsoft services - will be a stepping stone to Lumia, and will share the same cloud services.
"Lumia continues to be our primary smartphone strategy," Elop said. "Lumia is where we will continue to introduce the greatest innovation.
Wood said Nokia and Microsoft had an advantage over other users of open Android, such as some Chinese manufacturers, in that they had a ready-made set of services that they could slot into the phone.
"It means Nokia is able to participate in that entry-level space, but our view is they will try to push Windows Phone down into that space as quickly as possible," he said.
Nonetheless, devices running an open Android operating system will not sit easily within Microsoft, whose fortune is founded on the core belief that software should be paid for.
The Nokia X, which has a four-inch screen, will be available immediately, Nokia said. The X+, with more memory and storage, and XR, which has a five-inch display, will be on sale early next quarter priced at 99 Euros and 109 Euros, respectively.
They will be on sale in all markets apart from Japan and Korea, where Nokia is not present, and North America.
