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Nokia unveils new, thinner multimedia phones

The N76 tops Nokia's list of slim new high-end phones designed to compete with Motorola's Razr. Photos: N76 and N800

The world's largest cell phone maker, Nokia, unveiled slim new multimedia handsets at the Las Vegas Consumer Electronics Show in an answer to stiff competition from rivals such as Motorola.

The Finnish company, which makes one in three phones sold globally, has suffered from a lack of thin models in the last two years as consumers sought slimmer phones following the success of Motorola's Razr. The N76's debut at CES is intended to highlight not only the phone's stylishness but its multimedia capabilities.

At 13.7 millimeters thick, the new Nokia N76 phone is as slender as most slim-line models from smaller rivals. The Razr is 14mm thick and lags far behind in terms of features.

Nokia plans to launch the new ultra-thin Barracuda phone later in the year, although it has not yet revealed the measurements of this offering.

"Nokia seems to have recovered with much smaller casualties from the slim phone crises than from the clam shell crises," FIM Securities analyst Jussi Hyoty said in a note, referring to a 2004 setback when Nokia's share price halved in a few months after it lost market share to rivals offering folding models.

Nokia has been able to hang on to a global market share of around 35 percent thanks to booming demand for its cheaper models in emerging markets.

Shaving off millimeters
Nokia introduced its powerful N-Series in 2005, soon after Motorola hit gold with its thin but not very powerful Razr.

It launched a new version of its N93--the N93i--that is 3mm slimmer and doubles as a digital video camera. It will be available for 600 euros in the first quarter.

The N76 will be sold in the first quarter for around 390 euros ($511) before taxes and subsidies from operators.

The Finnish company also unveiled a new Internet tablet using the Linux operating system. Building on Nokia's first tablet--the 770--the N800 is faster, has a full-screen finger QWERTY keyboard and an integrated Web camera.

The device, which avoids time-consuming network-approval steps from mobile operators through a Wi-Fi short-range wireless Internet connection, will be available immediately in the United States and several European markets for around $400 and 400 euros respectively.

Nokia also will work with eBay's Skype to add Skype calls to the tablet by the end of the first half of 2007.

Biggest camera maker
Nokia said it was the world's largest camera maker last year, selling about 140 million camera phones, and the world's largest manufacturer of music devices, with 70 million music-enabled devices sold.

"More than 850 million people have a Nokia mobile phone in their hands. No other consumer electronics company in the world has ever had such a customer base," Nokia Chief Executive Olli-Pekka Kallasvuo said in a statement.

Nokia shares dropped sharply before the weekend on a sales and profit warning from Motorola, which was seen by investors as a result of fiercer price competition on the global market.

Analysts said reassuring comments from Nokia eased fears the company might also have suffered in the fourth quarter.

Nokia said it sold almost 40 million multimedia phones last year. It said the total market for these advanced phones, also called converged devices, was 90 million units in 2006, and is expected to grow to 250 million units in 2008.

"The 40 million numbers indicates strong fourth-quarter sales of these phones," said Handelsbanken analyst Karri Rinta.

"(The news flow) dispels suspicions Nokia would have to follow Motorola ... and warn on the fourth quarter," he said.

Nokia said it sold nearly 70 million music phones in 2006. It had aimed to sell 80 million music phones for the year.

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