Can Nokia Take on Apple in China?
In the midst of Nokia’s (NYSE:NOK) efforts to bolster its cash reserves by shedding non-core assets, the struggling smartphone manufacturer received some good news; China Mobile (NYSE:CHL), the country’s largest wireless company, has agreed to carry the Lumia 920T.
As Bloomberg reported on Tuesday, Nokia’s future profitability depends on the success of the Lumia line to offset its six consecutive quarters of losses. China Mobile’s decision to carry Nokia’s new smartphones will give the company the opportunity to gain back customers from Apple (NASDAQ:AAPL) and Google’s (NASDAQ:GOOG) Android platform.
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Nokia’s agreement with China Mobile will give it something that Apple does not have: a deal with the world’s largest mobile-phone company. China Mobile, with 703 million subscribers, does not have the network standard to support the iPhone, although its competitors China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA) both sell subsidized Apple devices.
Because China Mobile is not able to offer the iPhone, Nokia has the opportunity to use the company’s massive network of customers to capture a larger share of China’s smartphone market. Currently, the company’s market share in the country is falling. Ahead of Nokia’s Lumia 920T release, which is the company’s first Windows Phone 8 offering, smartphone shipments to China fell 64 percent to 5.8 million units last quarter, compared to a year earlier. Customers, reported Bloomberg, shied away from purchasing phones based on the Symbian software that Nokia is phasing out.
The phone will be available for order by the end of this month and cost 4,599 yuan, or $739, without a contract.
On Wednesday, Nokia also announced the less-expensive Nokia Lumia 620 as the third phone in its new Windows 8-powered smartphone series.
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