Nokia to bring Windows Phone 7 devices to China Mobile

China Mobile has more than 600 million mobile phone users

Nokia plans on launching Windows Phone 7 handsets through China's largest mobile phone carrier as the handset maker tries to fend off competition from Android devices and Apple's iPhone.

The smartphones would operate on China Mobile's 3G network using the TD-SCDMA standard, said Nokia executive vice president Colin Giles during a speech in Beijing on Friday. China Mobile has more than 600 million users or about two-third of the country's total mobile phone subscriber base.

Giles, however, did not give a specific launch date, and only said the phones would be introduced some time in the future.

Nokia reigns as the top selling handset manufacturer in China. But the company has struggled to maintained that position as sales for Android devices and Apple's iPhone grow, according to analysts.

Nokia's financial report for the second quarter indicated this downward trend as its mobile device shipments for China sank to 11.3 million, a 53 percent decline from the previous quarter. In the report, Nokia said competition and pricing tactics from rivals drove down shipments for the company's smartphones. Distributors and carriers also purchased fewer devices due to already higher inventory levels for Nokia products.

Globally, Nokia saw smartphone sales fall 32 percent in this past quarter. But the company hopes to reverse those fortunes once it begins launching smartphones running Microsoft's Windows Phone 7 operating system. Nokia CEO Stephen Elop has said he's confident the devices will first ship later this year and then in higher numbers in 2012.

Nokia's move to launch smartphones through China Mobile will allow the company to tap a vast user base, said C.K. Lu, an analyst with research firm Gartner. But the devices may not appeal to most customers given their estimated high price.

"Nokia's strategy is to use Windows Phone to position its smartphones as higher-end devices," Lu said. "But if you want the mass market, you have to drive down the price."

He noted Android handsets have already reached the low-end market and cost 1,000 yuan (US$157) to buy an Android device. A user would then need to buy the SIM card separately along with a service package. In comparison, Nokia's Windows Phone 7 devices will probably cost at around $300, according to Lu.

"I think this Windows Phone 7 will help them, but I don't think it will have a big effect," he added.

For the first quarter of 2011, Nokia had a 22 percent share of China's smartphone market, according to Beijing-based research firm Analysys International. Samsung had a 18.1 percent share, while Motorola grabbed a 12.9 percent share.

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Tags smartphonesNokiatelecommunicationconsumer electronicschina mobileCarriers

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Michael Kan

IDG News Service
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