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Nokia Introduces Asha 501

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The huge popularity of Asha flagship phones has inspired the Finnish handset manufacturer, Nokia Corporation (NOK - Free Report) to launch Asha 501. The handset is based on a new Asha 1.0 operating system.

The company will ship the new phone to Thailand and Pakistan from this week. Asha 501 will reach popular markets like India, Latin America and Europe later.

The mobile phone is available in both single and dual sim and features 3.2 MP camera with EDGE EGPRS (2.75G) connectivity. With 17 hours of battery backup, the new phone has Nokia's well-known enhanced battery life. It also includes all the popular social network apps. The new phone has an unique second home screen called Fastlane. It is quite similar to a personal diary and stores details like birthdays, official meetings, recently downloaded songs and apps.

Asha 501 is available in six different colors with a scratch-resistant and tempered glass display.  In order to compete with low-cost Android-based devices, Nokia has kept its price as low as $99.

In the recently concluded first quarter, Nokia shipped 5 million Asha phones, down 46.2% sequentially. Thus, to boost its Asha flagship sales the company has launched such advanced Asha phones.

Moreover, China, India and Latin America have been strong markets for Nokia and lately, the company has seen its Asha sales grow in these regions. Low per capita income and increased wireless Internet usage have mainly contributed to the healthy sales. Launching the phone in these markets is a strategic move by the company to capture the growing middle class market, where customers still prefer low budget feature-rich phones.

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 - Free Report) iPhone and Samsung’s Galaxy range, which runs on Google Inc.’s Android platform. In fiscal 2012, Samsung and Apple together sold more than 300 million smartphones as compared to Nokia’s 35 million.

So to recoup its market share, Nokia has teamed up with Microsoft Corporation (MSFT - Free Report) to offer Windows-based Lumia series of smartphones.  Nokia sold nearly 5.6 million Lumia phones in the first quarter of 2013, up 27% sequentially. Hence, we believe that the company will gradually improve its handset business by targeting both the markets (high and low-end markets), which includes both its smartphone and feature phone market.

Nokia currently carries a Zacks Rank #3 (Hold).

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