Nokia Targets Samsung With Cut-Price ‘Phablet’

LONDON – Nokia CEO Stephen Elop unveils the Nokia Lumia 1520 during an Oct. 22 event in Abu Dhabi. The company’s first “phablet” device, to be released next week, is set to undercut Samsung’s market-leading Note 3 by about $90. Agence France-Presse/Getty Images

Nokia Corp. is entering the “phablet” market with a new supersize smartphone set to severely undercut the price of Samsung Electronics Co.  market-leading Note 3 device when it goes on sale in the U.S. next week in advance of the holiday sales rush.

Microsoft Corp. , in the process of taking over Nokia’s phone unit, on Wednesday started taking preorders for the Lumia 1520 on its U.S. Web store, selling it for $199 on a two-year AT&T Inc.  phone plan, about $90 cheaper than the Samsung alternative. The device is set for release on Nov. 15, Microsoft said.

Nokia CEO Stephen Elop unveils the Nokia Lumia 1520The Lumia 1520—most likely one of the last smartphones to carry the Nokia brand name before Microsoft takes control of Nokia’s handset business—is Nokia’s first device in the growing phablet category of phones, which are usually defined as smartphones with screen sizes between 5 and 7 inches. Nokia will eventually start selling a 1320 phablet at considerably lower prices, aiming that device largely at emerging markets.

Large-screen smartphones have been getting increasingly popular among consumers as of late, largely bolstered by devices made by market leader Samsung, which has released a number of supersize phones, including the 6.3 inch Galaxy Mega phone, and its groundbreaking Note 3 device. In the U.S. the Note 3 sells for around $290 on a two-year AT&T plan.

Canalys, a market-research firm, said a record 56 million smartphones with screen sizes over 5 inches were shipped in the third quarter, accounting for 22% of total smartphone shipments in the quarter. Samsung Electronics Co., which introduced the category two years ago with its first Galaxy Note, dominates the market for these devices, selling well over half of them.

Nokia took the wraps off the 6-inch Lumia 1520 smartphone last month, at an event in Abu Dhabi where it also launched its first ever tablet. The Lumia 1520 is a premium device, sporting a high-definition 1080p screen, a 20-megapixel camera with a Carl Zeiss lens, and comes with Microsoft’s Office software suite preinstalled.

However, Nokia won’t compete with Samsung alone. Handset makers including HTC Corp., Sony Corp. and LG Electronics Inc. have also introduced large devices that fall somewhere between smartphones and tablets in size. While they barely fit in a person’s pocket, the clearly allow for a better browsing experience and offer better viewing of pictures or video.

Nokia last month said it shipped 8.8 million Windows-running Lumia devices in the third quarter, in the latest sign that Microsoft is finally seeing some progress with its push on the consumer market.

Nokia’s recent successes are largely a result of the popularity of its cheaper Lumia phones, rather than its more expensive products. In the third quarter, Nokia said it saw especially strong demand for its cheapest Lumia phone, the Lumia 520.

Amazon.com is selling this device for just $100 on a prepaid AT&T plan, without a contract or subsidy. Strong sales of this affordable device helped improve Nokia’s position in the important North American market, where it sold 1.4 million devices in the third quarter from just 300,000 devices a year ago.

– WALL STREET JOURNAL

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