Pricey Nokia phone faces tough competition

The N97 costs hundreds of dollars more than the popular iPhone and Palm Pre

"The hottest release of the summer," according to Nokia, is not the new iPhone 3G S or the Palm Pre. It's the N97, Nokia's newest high-end phone and one that few people have probably heard of.

The phone goes on sale this month, but the lines that have characterised the launches of the other high profile phones are unlikely, despite Nokia's characterisation of it as the hottest phone of the season. That's partly due to the price tag: the N97 retails for US$699.

The introduction of the N97 comes just a day after Apple announced the latest version of its popular iPhone and just three days after Palm began selling its long-awaited Pre.

The price of the N97 compares to the Pre's US$199 price tag, after rebate, and the 16GB iPhone 3G S's US$199. The original iPhone 3G now sells for US$99. Those prices are only good for customers who sign up for multiyear service contracts. The Palm Pre costs US$550 without a contract and the 16GB iPhone 3G S costs US$599 without a contract.

The N97 will also be hard to find. Customers can buy one from Nokia's flagship stores in New York and Chicago or from "various independent retailers and e-tailers," according to the company. Amazon is selling it for US$604, but won't ship until June 30. Other online retailers marketing the phone are unknown enough that shoppers might be wary of buying from them.

The launch of the N97 points to an ongoing struggle at Nokia to break into the North American market. While Nokia is the number one handset maker in the world, its market share in North America is around 8 percent. Despite talk over the last couple of years about investments made to improve its fortunes here, Nokia has little to show for it.

"Part of it is that Nokia has a low-end image among U.S. consumers," said Bill Hughes, an independent analyst who follows the mobile market.

That's a very different image than the one Nokia has in Europe. "Nokia is a premium brand there," noted Carl Howe, an analyst with the Yankee Group.

Nokia may be trying to reposition its image in the U.S. as a higher end phone maker. "I think they're trying to maintain some price discipline," Howe said. "The high end should be expensive. They're trying not to make it cheap and that's part of a premium brand strategy."

The challenges involved with executing such a strategy could explain Nokia's struggles in North America over the past years. "When you go down market, it's very hard to claw back up," said Howe. Nokia once had a much larger market share in the U.S., when it sold a phone that was tied to the very popular AT&T One Rate plan in the 1990s. But that phone was perceived as a utilitarian phone for the masses, not a premium phone.

Howe doesn't expect the N97 to do much better in North America than its predecessor, the N96, which didn't appear to improve Nokia's market share in the region.

Join the PC World newsletter!

Error: Please check your email address.

Tags iPhone 3G SPalm PreNokian97smartphones

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Nancy Gohring

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Michael Hargreaves

Windows 10 for Business / Dell XPS

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?