Nokia to enter portable laptop market
Sep 28, 2009 in Misc
The grapevine was buzzing with excitement but no one would confirm it. Now the curtain is up and the word is out. The world’s largest cellphone maker Nokia is on the verge of entering the portable laptop market. Surprised? Well, desperate situations call for desperate measures. The Finnish company has experienced eroding profit margins over the last few quarters with the global recession taking its toll on handset demand. Nokia management thinks the way out of the woods is to take the plunge into the portable laptop market — something that’s clocking explosive growth since the product was launched in 2007. The competition is fierce. But if Apple could bridge the gap over from Mac to iPod and finally to iPhone, Nokia can, arguably, also travel in the opposite direction.
The jury though is still out on Apple’s decision to launch the iPhone, a product that is yet to take off. But then Apple never had prior experience in producing handsets. Nokia though holds a slight advantage in this area since Nokia had a PC business earlier, which management wrapped up in 1991 to turn their focus to producing quality handsets. But that’s no guaranty that Nokia’s portable laptops would not bite the dust since the specific market generally has a profit margin which is razor thin and which can take another bite off Nokia’s falling profit margin, at least over the short term. But if Nokia can get a foothold on this section, then the returns promise to be rich in mid-to-long term. Global analysts feel that Nokia can stand out in the crowd dominated by stalwarts like HP and Dell by doing things differently. But how do they plan to do that?
Nokia’s first portable laptop — the Nokia Booklet 3G — promises to be lean, mean machine weighing only 1.25kg. But there are not too many surprises in store and the product is planned largely to be similar to other such portable laptops available in the market. And the biggest disappointment probably comes in the form of the Microsoft Windows operating system, whereas many analysts had thought that Nokia would use Linux for the Booklet 3G. The processor too will be from Intel — the tried and tested Atom. This may come as a further disappointment to serious computer games geeks who swear by AMD’s Turion for the ultimate gaming experience.
So although Nokia does not appear to be bringing something radically different to the table, the sheer size and the tectonic growth of the market may swing the pendulum to its favour in the portable laptop segment. Consider this: according to data made available by research firm IDC, the estimated growth in the shipment of portable laptops should shoot through the roof at 127% in 2009. Converted to absolute terms, the expected shipment should cross 26 million units this year. This piece of data should sound like music to Nokia management since the saturated handset market is on the decline and has shrunk 10% over the last one year.