Europe’s Nokia to Take on Palm in U.S. Market War

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By Paul de Bendern HELSINKI (Reuters) – Look out, Palm, here comes the ”brick.” The rectangular-shaped Communicator, Nokia (news – web sites)’s (NOK1V.HE) all-in-one personal data organizer and mobile phone from Finland, has surpassed Palm as the most popular handheld computer in Europe. And, it’s set to hit U.S. store shelves by early summer. While some are leery of its hefty price — about $799 — its growing fan base of business users laud the Communicator as the first device to successfully meld the mobile phone with the hand-held computer. “It’s the first device that makes it possible to use a phone as a true organizer,” said Andy Buss, a London-based analyst at Canalys.com research group. “It’s for people who want one device for everything; you can manage your life on the go.” Wait around any European airport lounge and you’re likely to spot someone holding an eyeglass-case sized phone to their ear. Moments later, you’ll see the same person open the case on their lap and begin typing on the miniature keyboard concealed inside. That’s the giveaway it’s a Communicator, considered by many analysts to be one of the first true “convergent” devices bridging the phone and computer worlds. In Scandinavia, the color-screen device is like a membership badge in a club of elite investment bankers, venture capitalists and executives. It is also popular among trendy young designers and other folks with deep pockets. “I love it because I can keep everything in it. Everything’s there, and it’s my phone as well,” said Maria Westerberg, an interior designer in Stockholm. “It’s great for writing quick notes so I can remember things I’ve got to do, like meetings, but also other simple things like the name of a book. It’s easy to erase the note once you don’t need it,” she said. On the surface it looks like a bulky cellular phone — hence the disparaging “brick” designation. Inside is a high-resolution, easy-on-the-eyes color display and keyboard. In fact, with its earpiece and speakerphone function, for most people it serves as the principal mobile phone as well as data organizer. If they have another phone, it is most likely a small one for evening occasions. THE ULTIMATE ORGANIZER? But, if the Communicator is so great, why has it taken so long to introduce it to gadget-loving America? Nokia is, after all, the No. 1 maker of mobile phone handsets — in the United States and worldwide. Analysts say it’s a matter of timing. In contrast to Palm handhelds, with their roots in the computer industry, Nokia’s history is firmly in mobile communications. The great crossover opportunity for Nokia’s handheld device in America will be the advent later this year of new mobile networks capable of speedy Internet service. This will allow fuller access to e-mail and Web pages, including video, via mobile handsets. On the computer side, the Nokia Communicator powers an extensive contacts book, calendar and note pad. It also has a word processor, spreadsheet function and imaging programs. The gadget can read and edit slimmed-down versions of Microsoft’s Word, PowerPoint and Excel. When hooked up with a desktop computer, data can be synchronized between the two machines just like a Palm or other handheld. But it’s more than simply an office-in-your-pocket, analysts and industry experts say. It offers quick and easy communication: access to the Internet, corporate network e-mail, fax and standard voice call services. It has facilitated the use of popular text messaging, something the Blackberry (Nasdaq:RIMM – news) two-way pager is known for in the United States. Communicator users can also send and receive photos taken from a digital camera. What has won it followers in Europe — with a market share of around 30 percent, according to Canalys.com — is that the phone and computer organizer functions work well together. Several personal organizers, such as Handspring, Palm and Compaq’s iPaq, have mobile phone accessories but they can also be awkward and clunky. One advantage of the Communicator is that users surfing the Internet won’t be disconnected by an incoming call. When a call comes in, a message appears showing the number. If the user decides to take the call, it’s easy to disconnect from the Internet. DRAWBACKS: ACCESS LIMITS, RIVALS The biggest drawback, apart from size and price, is that it works only on the relatively new and small GSM wireless network. GSM, or Global System for Mobile Communications — far and away the most popular system in Europe and other countries around the globe — competes against more popular U.S. networks like TDMA and CDMA (news – web sites). But GSM networks, on which the Communicator runs, promise to become more widespread as AT&T Wireless (NYSE:AWE – news) and Cingular Wireless (NYSE:BLS – news) (NYSE:SBC – news), two of the nation’s biggest mobile operators, are now building such systems. Still, the Communicator will have many competitors this year, starting with the Treo, a Palm-based phone and organizer made by Handspring Inc. (Nasdaq:HAND – news) that will cost $599. Phones from Samsung Electronics (05930.KS) and Kyocera (6971.T) have incorporated Palm’s popular operating system to create phones with limited computer functions. Siemens (SIEGn.DE) is also coming out with a touch-color-screen combination phone, powered by Microsoft Pocket PC (Nasdaq:MSFT – news) software, this year.

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