Nokia to cut back on new smartphones in 2010

Nokia believes a smaller smartphone base will allow it to have a more focused portfolio

Nokia has announced plans to cut back on its range of smartphone models next year. The company has seen its lead in the market decline, as rivals Apple and RIM continue to make ground.

Jo Harlow, the new chief of Nokia's smartphone unit, said at the firm's capital market day this week that its portfolio of smartphones would be reduced by 50 per cent.

Harlow added that competition in the market had been fierce, but that she believed Nokia had the ability to go on the offensive, rather than simply defending its position.

"We have an unrivalled distribution network in over 100 countries across 250 operators in 70 languages. As such we believe we have the ability to drive new services and content to the mass market," she said.

Harlow was appointed to the new role in October after Nokia reported that its smartphone market share had fallen to 35 per cent in the quarter ending in September, from 41 per cent in the previous quarter.

Antti Vasara, head of smartphone research and development at Nokia, speaking alongside Harlow at the event, said that decreasing the number of smartphones would allow Nokia to put more effort behind fewer products.

"This will cut down on unnecessary differentiation, so that we have a far more focused portfolio for next year," he said.

Vasara added that the company is more focused on enhancing the user experience than developing new features for the coming year.

Ian Fogg, an analyst at Forrester, believes that the move shows Nokia being aggressive with its strategy in the smartphone market, rather than turning its back on it.

"By reducing the number of models in its portfolio, Nokia is making it easier for developers to target its devices with applications that will work across all models," he said.

The analyst also suggested that a clearer product focus would give Nokia a far better marketing position around which to push its products in 2010.

Nokia also outlined its view of the industry for next year, saying that it expects industry mobile device volumes to rise by around 10 per cent, although its volume market share will remain flat in comparison with 2009.

The company's chief financial officer, Timo Ihamuotila, noted that the overall mobile device market appears to be stabilising.