Nokia Unveils Low-Priced Phones

BARCELONA — Nokia on Monday introduced two new low-priced basic cellphones, plus two lower-priced versions of its flagship Lumia Windows smartphone — part of an effort by the former market leader to compete amid an intensifying price war in handsets.

The four new phones — the Lumia 720, Lumia 520, Nokia 301 and Nokia 105 — will help Nokia maintain and perhaps build on its position as the No. 2 maker of cellphones worldwide behind Samsung and fend off challenges by two Chinese manufacturers, Huawei and ZTE, analysts said.

The Lumia 520, selling for €139, or about $183, in Europe and $179 in the United States, is priced 25 percent less lower Nokia’s least-expensive smartphone, the Lumia 620.

“I think that with the Lumia 520, Nokia is really going to take the Windows 8 operating system to a much bigger, mass market,” said Pete Cunningham, an analyst at Canalys, a research firm in Reading, England. “I would expect their volumes of Lumia shipments to now start increasing slowly, but they still have a way to go.”

Samsung overtook Nokia last year as the leading global maker of cellphones, amassing a 23 percent market share. Nokia’s market share slipped to 17.9 percent from 24 percent during 2012, according to the market research firm IDC. Apple ended the year in third place at 9.9 percent, followed by ZTE, with 3.6 percent, and Huawei, with 3.3 percent.

The new handsets, which the company unveiled at the Mobile World Congress industry convention in Barcelona, reinforced Nokia’s strategy of targeting the least-expensive but fastest-growing parts of the market. The Nokia 105, the company’s new basic, entry-level phone, will sell for €15 — less than the price of a pizza in some countries.

T-Mobile U.S.A. has agreed to sell the Lumia 520, a 3G phone with a 4-inch touchscreen, in the United States starting in the second quarter, Nokia said.

In 2012, the global market for cellphones that cost $250 or less grew by 99 percent from its level in 2011, and accounted for more than half of all cellphones sold worldwide, according to IDC. The upper-end segment of smartphones costing more than $250 grew by only 23 percent during the same period.

“Nokia is targeting the right end of the market with new, inexpensive phones,” said Francisco Jeronimo, an analyst with IDC in London. “This is where the growth is.”

Nokia, the global market leader in smartphones as late as 2007 before Apple produced its first iPhone, trailed the likes of Blackberry, LG and Motorola with a roughly 4 percent market share in the fourth quarter, according to IDC. Huawei and ZTE, the No. 3 and No. 5, each sold more than twice as many smartphones as Nokia.

This year for the first time, more consumers around the world will buy a smartphone than a simple, basic cellphone, according to IDC.

Stephen Elop, the Nokia chief executive, said the new, lower-priced Lumia handsets would give the company a full array of smartphones it had been lacking.

“These are less-expensive devices, but they will move in much larger volumes,” Mr. Elop, a former Microsoft executive, said during an interview.

Mr. Elop said Nokia was committed to making some of Lumia’s unique features, such as digital lenses that allow users to enhance their own photos, available throughout the entire Lumia lineup, instead of reserving the most advanced features for the most expensive handsets.

The Nokia-Microsoft alliance that was announced two years ago in February 2011, Mr. Elop said, is gaining momentum. He dismissed the possibility that the company would eventually abandon its software partnership with Microsoft for another operating system, such as the Android system made by Google.

“There’s no doubt in my mind that that was the right decision” to choose Microsoft, Mr. Elop said. The alliance with the world’s largest software maker has set Nokia apart from handset makers relying on Android, Mr. Elop said, preserving an identify and edge for Nokia and its products.

With the Lumia line of smartphones expanding, Nokia can begin to sell Microsoft phones increasingly to businesses, which may already be reliant on Microsoft Windows and e-mail services in their operations, Mr. Elop said.

“Being able to bring those all together I think is a very powerful force,” he said. “And it’s something that’s just beginning.”

Nokia sold 4.4 million Lumia smartphones in the fourth quarter, up from 2.9 million in the third quarter. Mr. Elop declined to say how sales of Lumia had develpoped in the first two months of the year. But he suggested that the three new handsets introduced over the last three months would help sustain sales momentum.

The Lumia 920, 820 and 620 are new devices that will translate into new sales, he said. “All of those things will contribute to what we hope to see in the future,” he said.

In the fourth quarter, Nokia generated an profit of €202 million, compared with a loss of €1.1 billion a year earlier.

The Nokia 301, a mid-range feature phone, will be introduced in the second quarter and sell for €65. The 3G handset can display streaming video and comes with a 3.2 megapixel camera and panoramic, wide-angle lens. The Nokia 105 will eventually replace the entry-level Nokia 1280, which sold more than 100 million units in the past two years.

The Nokia 720, which will be sold initially in Asia and Europe, is a 3G handset targeting social media users. The phone, which will sell for €249, comes with 8 gigabytes of internal memory and an SD-card slot for additional storage. China Mobile has agreed to sell the handset in China starting in the second quarter, Nokia said.

Nokia's Low-Priced Phone Targets Emerging Markets

BERLIN — Nokia, struggling to regain traction with its make-or-break line of Windows smartphones, introduced a moderately priced, Internet-ready model on Tuesday targeted at emerging markets around the world.

Nokia said the new smartphone, the Lumia 510, would cost about $199 and be sold initially in India, China, Latin America and some other emerging markets where the penetration of smartphones, unlike those in more mature Western markets, is still very low.

The new smartphone is the eighth in the Lumia line running the Windows operating system. Nokia is hoping the line will reinvigorate sales and is resting much of its future on its success, according to analysts.

Last week, Nokia reported a loss of €969 million, or $1.26 billion, for the third quarter, as sales of Lumia smartphones fell to 2.9 million units from 4 million in the previous quarter.

Nokia, the global smartphone market leader until the arrival of the iPhone from Apple in 2007, is fighting to reassert its relevance in an industry that has become increasingly dominated by models running Apple’s iOS and Google’s Android mobile operating systems.

The newest smartphone is the first step in a major expansion of the Lumia line announced last week to create a full range of alternatives to iOS and Android phones.

“With the Nokia Lumia 510, we continue to meet our commitment to bring Windows Phone to new, lower price points,” said Jo Harlow, executive vice president of Nokia’s smart devices business.

While the company, based in Espoo, Finland, has slipped in the global rankings during its two-year transition to Windows phones, it remains the No.2 maker of cellphones after Samsung. In the second quarter, Nokia sold 84 million cellphones worldwide while Samsung sold 93 million, according to Strategy Analytics, a research firm in Boston.

The Lumia 510 will be sold starting in November in five different colors, red, yellow, cyan, white and black, and will run on version 7.5 of the Microsoft Windows Phone operating system. The touch-screen phone comes with a five-megapixel camera and Microsoft’s scrolling tiles interface.

Nokia is seeking to exploit its sizable presence in emerging markets, where consumers are just beginning to buy Internet-ready smartphones.

Sixteen years after Nokia introduced the world’s first smartphone, the Nokia Communicator, the number of smartphone users worldwide finally topped one billion at the end of September, according to Strategy Analytics. But it will take less than three years, by the end of 2015, to add the second billion, according to the research firm.

Neil Mawston, a Strategy Analytics analyst in Milton Keynes, England, said most of those new buyers were expected to come from markets that Nokia was targeting with the Lumia 510: China, India and other emerging markets in Asia and Latin America.

Nokia’s long history in emerging markets will benefit the Finnish company, Mr. Mawston said, but it must still overcome the reputational damage suffered among consumers over the past two years as it phased out phones based on Nokia’s in-house operating system, Symbian.

He compared Nokia’s challenge to that faced by Samsung, which was struggling before it released the Galaxy S smartphone in March 2010. Sales of the Galaxy smartphone line helped Samsung overtake Nokia this year as the top cellphone maker.

“It will be a double-edged sword for Nokia,” Mr. Mawston said. “But there is definitely potential for Nokia to turn things around. They only need one killer device.”

Convertible bonds planned

Nokia plans to raise €750 million by issuing bonds that can be converted into shares, seeking an inexpensive way to bolster its fragile finances as it battles to win back market share, Reuters reported from Helsinki.

With its cash reserves falling and its credit ratings cut to junk over the past year, analysts have said Nokia needs to show a turnaround in the next several months if it is to survive.

But analysts said Nokia was smart to choose convertible bonds, which normally pay lower interest rates than conventional bonds because they offer investors the chance of making money when they are converted into shares.

“It is a rather cheap way to get extra financing,” said Mikko Ervasti, an analyst with Evli.