Back to top

Analyst Blog

Global handset manufacturer, Nokia Corporation (NOK - Analyst Report), introduced Asha 501, the first from its new Asha smartphone platform. The company is targeting the entry level smartphone customers who want to upgrade their phones.

Asha 501 happens to be the first smartphone to be built on the new Asha platform, which is an open standard platform and allows any developer to create and upload mobile applications. The new smartphone possesses many high-end features like a 4GB memory card, Wi-Fi facility, a 3.2 megapixel camera and is preloaded with social networking sites. However, the 3 inch screen is smaller than most smartphones and it does not support 3G networks.

Significantly, Nokia has introduced two new features namely Home and Fastlane in the smartphone. Home is a standardised application grid used for launching individual apps while Fastlane keeps track of the recently accessed contacts, social networks and applications used by the user. 

Asha 501 is designed to simplify smartphone usage and comes at a low price of $99. The phone is expected to be shipped from Jun 2013 and is likely to be available through 60 operators and distributors spread across 90 countries.   

In the last couple of years, Nokia has fallen behind in the smartphone leadership race, which has been mainly dominated by Apple Inc.’s (AAPL - Analyst Report) iPhone and other smartphones running on Google Inc.’s smartphone. Though the company joined hands with Microsoft Corporation (MSFT - Analyst Report) to produce Windows-based devices, the partnership didn’t yield any meaningful results initially.

However, in the last quarter, the company performed impressively based on a good show from its Lumia series. Although Lumia sales increased, Nokia’s Symbian OS-based phone lagged way behind its high-end counterpart. Nokia sold only 0.5 million Symbian handsets in the first quarter, representing a 77.3% annualized decline.  

Historically, India and Latin America have been strong markets for Nokia and lately, the company has seen its Asha sales grow in those regions. Low per capita income and increased wireless Internet usage have mainly contributed to the inspiring show. We believe that Asha 501 along with its added features and low price will be attractive to customers particularly in the developing countries, where customers still prefer low budget phones.

Nevertheless, low cost handset manufactures remains the prime concern for Nokia, who can capture Nokia’s market share by offering entry level android based smartphones at cheaper rates.

Currently, Nokia carries a Zacks Rank# 3 (Hold).

Please login to Zacks.com or register to post a comment.