February 26, 2009

Nokia Considers Foray Into PC Market

Nokia, the world's top cell phone maker, is contemplating a jump into the laptop market.

"We are looking very actively also at this opportunity," said Nokia Chief Executive Olli-Pekka Kallasvuo when asked about the possibility of Nokia entering the laptop market.

Rumors have swirled within the industry about Nokia's possible jump into the PC market since last year.  Kallasvuo's statement was the first official clue that the company is truly thinking about the possibility.

"We don't have to look even for five years from now to see that what we know as a mobile phone and what we know as a PC are in many ways converging," Kallasvuo said.

"Today we have hundreds of millions of people who are having their first Internet experience on the phone. This is a good indication," he added.

The comments come after Acer, the number 3 PC maker, entered the phone business with eight cell phone models.  Recently, PC industry leader Hewlett-Packard and number 4 Lenovo also entered the promising mobile phone market.

The move by PC makers is understandable considering the strong profit margins in the smartphone industry.

Nokia's move into the low-margin computer market leaves some analysts guessing.

"Nokia may be nervous about entering a market segment that is already heavily commoditized, but it would be in a position to exploit its enormous scale in manufacturing, supply chain and distribution," said Ben Wood of CCS Insight.

"All leading mobile network operators and retailers are adding connected notebooks and netbooks to their portfolios alongside mobile phones. On this basis it comes as no surprise that Nokia is evaluating this segment," Wood told Reuters News.

The PC industry, which held steady for most of last year, is now caught up in the economic downturn that has hurt much of the technology sector.


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