Nokia is betting low-priced phones with Internet capability will help it regain lost ground in crucial emerging markets after falling behind in the global smartphone race.
On Thursday, Nokia CEO Stephen Elop unveiled a new $99 phone in its mid-range Asha line at a launch in India, one of the most important markets in his bid to revive the struggling Finnish firm.
The new phone offers Internet access on a touch-screen with built in applications for popular social media sites and more features than earlier models, which fell short of a full-fledged smartphone.
He also announced a revamp of the Asha software platform in the hope of persuading more developers to write applications for Asha phones.
Elop, hired in 2010 to turn around the once-dominant handset maker, is under pressure as a controversial decision to switch to Microsoft Corp's Windows software is yet to bear significant results after two years, with shareholders this week saying he should reconsider the move.
Although more people are buying phones with computer-like features, most of the handsets Nokia sells are regular phones. Its failure to cash in on the smartphone boom saw it last year cede its 14-year reign as the world’s top phonemaker to South Korea's Samsung Electronics.
“The market is undeniably moving towards smartphones - although India may be moving at a slower pace than the likes of China, but it is still the case,” said Jessica Kwee, a Singapore-based analyst at research firm Canalys.
While Nokia has seen brisk sales of its Windows-based Lumia smartphones, it still has just a 5 percent share of a global smartphone market dominated by Samsung and Apple Inc.
So-called “smart feature phones” like those in the Asha range, which have limited smartphone capabilities such as Internet and email access and touch screens but are cheaper than the likes of Samsung’s high-end Galaxy models or Apple’s iPhone, are crucial to Nokia’s future as it defends its leading market share in emerging economies such as India and Africa.
The launch of Asha, which means “hope” in Hindi, last year helped Nokia recapture some of its lost share in India and retain its leadership at about 26 per cent of a market where it faces growing competition from Samsung and local rivals such as Micormax, Karbonn and Lava.
The new Asha 501 launched on Thursday has design elements similar to the higher spec Lumia line, features applications for social media sites such as Facebook, LinkedIn, and Twitter, and supports Indian languages.
India has been a rare bright spot for struggling Nokia, which has seen its sales fall year-on-year for eight straight quarters. It was Nokia’s No.2 market in 2012 after China in net sales and has been relatively steady compared with China, where net sales fell nearly 60 percent last year.
