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China's Wi-Fi standard stymies Nokia plans

The Nokia 9500 Communicator handset won't make its way into the country because the company can't meet the deadline for an imposed encryption standard.

When the feature-packed Nokia 9500 Communicator makes its way to customers later this year, there will be one glaring omission from its list of destinations: China.

That's because the new handset, which supports the 802.11b wireless standard, Bluetooth and EDGE (Enhanced Data Rates for GSM Evolution) mobile networks, has become another high-profile casualty of China's new Wi-Fi encryption standard.

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"The Chinese regulation was only announced in December, by which time our product was already into its being. In that light, it will be very difficult for us to meet the June 1 deadline," a Nokia representative said, adding that the company is currently evaluating the situation.

Starting in June, all Wi-Fi equipment sold in China will have to comply with the proprietary Wired Authentication and Privacy Infrastructure (WAPI) protocol, which was developed in the country and reportedly controlled by local companies. Last week, chip giants Intel and Broadcom said they will halt sales of their Wi-Fi wares in China because of the new requirement.

The problem represents a small setback for Nokia's fledgling Enterprise Systems group, which sees businesses as a prime target for the new Communicator handset but may now have to settle for corporations outside China.

The business unit was formed last October as part of a companywide effort to sharpen its focus on the lucrative enterprise market, which Nokia believes to be still in its infancy and holds "significant" revenue potential.

The Finnish handset leader is also working with IBM, Fujitsu and Oracle to expand its applications offerings.

Aloysius Choong of CNETAsia reported from Hong Kong.