Nokia Launches New Low-End Handsets

Nokia launched two new low-end handsets, the 1110 and 1600 models, at a press conference in Kenya on Thursday. The new phones are aimed at developing markets and will be relatively inexpensive, allowing low-income customers to own a mobile phone.

The 1110 will be monochrome with an inverted black and white screen aimed at better visibility in sunnier climates, while the 1600 will be the color version of the 1110.

Initial pricing for the phone will run between $80 and $105 USD according to Nokia; however, analysts said once the phone is shipping in larger quantities after its launch in the third quarter, prices would likely begin to fall.

Africa is one of the fastest growing mobile phone markets in the world, with more than 100 million subscribers expected by the end of the year, doubling to 200 million by 2009, according to Nokia. "The number of new mobile users in fast growing markets continues to rise dramatically and nowhere is the rate of growth more evident than in Africa," Juha Pinomaa, vice president of Nokia's mobile phones unit said.

It is unlikely, however, that Nokia will get into a pricing war with Motorola, who said it was hoping to sell its phones for as low as $40 USD in China. Motorola is hoping its new aggressive pricing structure would help it to regain lost market share.

Nokia already slashed prices on its phones last year after losing market share due to a lack of attractive camera phones or clamshell models within its lineup. However, this year it filled those gaps in its product offerings and has begun to gain market share once again.

Nokia produces about two times the number of phones as second place Motorola does. Analysts say that this puts the company in better financial shape to lower its prices on its phones and still turn a profit.