Wednesday, October 26, 2011

Nokia bets on Windows Phone

Finnish mobile phone maker Nokia has launched two new smartphones based on Microsoft's new Windows Phone 7.5 operating system.

The Lumia 800 and the Lumia 710 mark the beginning of Nokia's fightback against Apple's iPhone and rivals using Google's Android software.

Nokia's new boss, Stephen Elop, had previously warned that the company was stuck on a "burning platform".

Today he said the launch marked the "rebirth" of Nokia.

In an unusual move for the company, it will start shipping the Lumia 800 range almost immediately and hit the shops in France, Germany, Italy, UK, Spain and the Netherlands in November.

The firm also announced four new basic phones.

The brightly coloured handsets are pitched at developing countries.

Mr Elop said the phones would blur the boundaries between feature phones and smart phones, bringing the internet "to the next billion people".

The new range will be called Asha, a name that clearly identifies Nokia's target market: the name is derived from the Hindi word for "hope".

Although the phones will be relatively cheap, they will sport features like touch screens, 5 mega pixel cameras, bright screens, 32GB storage for music and long battery life.

Smartphone fightback

However, profit margins in the market for basic phones are razor thin, and so Nokia's main focus will be on its new smartphones.

Until recently, the company was the world's largest maker of smartphones.

However, its market share has been falling rapidly, and in one of his first moves after taking over at Nokia a year ago, Mr Elop ditched Nokia's two operating systems for phones - the venerable Symbian and the Linux-based MeeGo - and struck a broad alliance with Microsoft.

Now Microsoft's new Windows Phone 7.5 operating system, also dubbed Mango, will power all Nokia's smartphones.

Mr Elop acknowledged that the Lumia 800 was a design development of a previous Nokia phone, the Symbian-based N9.

Mr Elop said the "Lumia is the first real Windows phone" and predicted the company would be the leader in "smartphone design and craftsmanship".

The Lumia 710, which comes in a range of funky colours, will be pitched as the "affordable" Windows phone.

The phone's product manager, Kevin Shiels, said the new phones would have integrated cameras with high-end Carl Zeiss lenses.

In an explicit dig at Apple's iPhones, he demonstrated how Windows Phone shows information and updates directly on the first screen, without having to tap into applications.

Speaking at the Nokia World congress, Mr Elop said Nokia had "some tough decisions to make, but [we] have started to deliver some early results".

Nokia had been seen as "reliable, trustworthy", like a mother that will "comb your hair... but that's not good enough," he said.

"We expect people to see something special when they hear Nokia," said Mr Elop.

Nokia services

To distinguish itself from other makers of Windows phones like HTC, Samsung and LG, Nokia is betting on a range of services.

Key among them is the integration of location-based services like Nokia Maps, real-time navigation software Nokia Drive, a live-streaming music service Mix Radio and Liveview, an augmented reality service.

Nokia's navigation service Drive will be free. It will not run in an app but will use HTML 5 technology, and will be updated with traffic information in real-time.

Nokia will also deliver its phones with the ESPN sports hub, which will provide free access to text and video news from ESPN.

The biggest innovation, though, could be Nokia Pulse, a service that combines elements of social networking with location services. It allows users to share with friends and family experiences - from pictures to whereabouts to activities, integrated with Nokia's mapping service

Cold water

Shortly before Mr Elop announced the switch to Microsoft Windows Phone, he sent an email to his staff, in which he compared the company to a man on a burning platform, who had the choice of burning to death or jumping into the icy waters below.

The launch of the new phones is Nokia's splash landing. Mr Elop will hope that the new hardware and software offering will be popular enough with consumers to allow the company to swim.

But it is not just Nokia that has a lot riding on the launch of these phones.

Software giant Microsoft has been struggling for years to break into the mobile phone market. Its most recent offering, the Windows Phone 7 software, has been well received but gained little traction in the market.

The company will hope that Nokia's close relationship with mobile phone network operators around the world will give it the access to consumers that has been lacking so far.



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IBM names female chief executive

Technology giant IBM has appointed its first ever female chief executive.

Virginia Rometty, currently a senior vice president, will take over from the current chief executive, Sam Palmisano, in January.

Mr Palmisano, who took the top job in 2002, will step aside whilst remaining chairman of IBM.

Both executives helped steer the company from mainly selling personal computers to selling software and services.

Ms Rometty, 54, is also widely known as Ginni.

"Given Ginni's experience running the largest portion of the business by revenue, she was a logical choice," said Macquarie Securities analyst Brad Zelnick.

She joins a relatively small circle of top female chief executives, including Pepsi's Indra Nooyi, Xerox's Ursula Burns, Kraft Foods' Irene Rosenfeld and DuPont's Ellen Kullman.

Hewlett-Packard - a longtime rival to IBM - recently appointed Meg Whitman as its boss.



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Kindle sparks Amazon profit fall

Profits at the online retailer Amazon have dropped 73% after the company invested heavily in the Kindle tablet computer.

The company, the world's largest online internet retailer, said third quarter net income was $63m (�40m, 45m euros).

During the period it launched the Kindle "Fire" model, which runs apps and streams films and other non-text content.

The results left Amazon shares down 12% in after hours trading.

The company said that sales had grown by 44% and that last month, on 28 September, it had its "biggest order day ever for Kindle, even bigger than previous holiday peak days".

It now offers four Kindle devices, including a 3G model.

Lower margins

Jeff Bezos, the founder and chief executive of Amazon, said: "In the three weeks since launch, orders for electronic ink Kindles are double the previous launch. And based on what we're seeing with Kindle Fire pre-orders, we're increasing capacity and building millions more than we'd already planned."

Amazon also forecast lower-than-expected sales for the next quarter, which includes the crucial Christmas period, and said it could even see an operating loss as it continues to invest in the Kindle Fire.

Amazon's profit margins have generally been lower than other technology firms, a situation that analysts say is now catching up with them.

"Investors have always given Amazon a hallpass to invest and it looks like they may have had their patience exhausted," Lawrence Haverty from Gamco Investors told the BBC.

"Its operating margin is only 4%. Most technology companies need an operating margin of over 20% so I think investors are asking themselves if the business will ever really be profitable," he said.



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