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Nokia ambushes rivals with flashy, lightweight 8210

Tero waxes lyrical on Nokia's pincer movement

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Column Nokia's weakest point in the handset market this winter has been the narrow selection of under-100 gram models. Currently the only entry is the 8810, which works in just GSM-900 and had no truly advanced features like voice-dialling. GSM-900/1800 dual-band competition from Motorola and Ericsson has given the competition manoeuvring room after being flattened in the 150-gram weight class by the triple punch of 6110, 5110 and 3210 product intros. In North America the competition in miniature models is only starting this winter, but in GSM markets nanophones have become a key indicator of competitiveness. Earlier this fall Nokia announced the 8850, which is 91 grams and has the necessary high-end stuff like a blue-light display and voice-dialling. The problem here is the price - anticipated at $1,000. This phone is apparently a pretty narrow luxury product aimed only at affluent customers. But today Nokia announced the 8210, which seems to suddenly put Nokia's strategy into a new perspective. It weighs 79 grams, has picture-messaging, voice-dialling, infra-red link, customisable covers, etc. Industry observers expect that it will be priced below the 8850 and will sneak into markets by Christmas. As a sportier version of the 8850 it broadens crucially Nokia's product range just as competition is heating up. Nokia may now be the only brand with a genuine product segementation strategy in the 90-gram weight class. There aren't many genuine performance differences here. Most contenders pack an infra-red link, voice-dialing, vibra-alert, etc. The importance of design and brand positioning is crucial right now. Next year the emphasis may shift back to incorporating new breakthrough technologies such as WAP, Bluetooth and GPRS. Ericsson and Motorola both have just one appealing ultra-light model. Nokia seems to be positioning the 8850 above the competition, which should translate into hefty profit margins. And now the 8210 is positioned below the 8850, offering a more hip, youth-culture oriented version of a miniature phone. This is how segmentation is supposed to work. The 8850 is more expensive and distinctive than most direct competition; the 8210 is cheaper, gutsier and more colourful - coming with high-volume advantages. The exchangeable colour covers will provide the same customisation edge for the 8210 that is currently boosting 3210 sales in Europe and Asia. So instead of trying to compete directly with Ericsson's T28 and Motorola's V3688, Nokia is redefining the concept of what a 90-gram phone is. It's not a sedate, muted sign of affluence for business people. It's rather either a genuine luxury item (8850) or a funky piece of street fashion with an individual theme cover option (8210). This is the very same guerilla war pincer-movement that worked so well last year. Motorola's and Ericsson's miniature phones resemble Audi - an understated, classical blend of conservative design and solid performance. In comparison, Nokia's new 8850 is a Ferrari; brazenly ostentatious piece of giddy excess. It's not meant to be classy. It's meant to be an eye-popping high-end extravaganza wrapped in a sheen of trashy pop culture glamour. Aluminium-magnesium alloy used in the moulding, metallic keypads and blue-light display lend it an ironic air of sci-fi aesthetics. This is miles from the conventional view of 90-gram phones as executive accessories meant to be dull and dignified. The new 8210 takes the iMac/Volkswagen Bug path of millennial design zeitgeist. It injects into the miniature phone market the same faux-naif Hello Kitty appeal that turned the 5100 series into a blockbuster last year. To some observers, both the 8850 and the 8210 may seem slightly off-the-wall. These would be the same people who scoffed when Apple and Volkswagen decided to take a gamble with their key products. I don't see Nokia as a Gorilla - I see it as a Guerrilla. Instead of directly confronting the enemy in their core product categories, you can attack the competition by moving upmarket and downmarket simultaneously - using new design approaches to make the rival models seem like moldy middle-of-the-road compromises. Nokia's Christmas shipping schedule for the 8210 is lightning fast - which would make this a classic ambush operation aimed at undercutting the momentum T28 is now building. Guerrilla product launches can create a lot more buzz than pre-announcing models 6-9 months in advance. The challenge for Motorola and Ericsson now is to break out of their design traditions and move into uncharted territory. Motorola is too tied to its wildly successful Startac franchise dating from the mid-Nineties; the look and feel of Ericsson's new phones still echo the 1997 glory days when the 7xx series revolutionized the industry. If these two giants can't morph into something new and exotic, someone else will meet the challenge. The buzz created by new Samsung and Bosch models this fall is a storm warning. ® Tips? Rants? Raves? Inside info? Give a piece of your mind to Tero. Confidentially: tpkuitti@operoni.helsinki.fi Tero Kuittinen is the Vice President of Wireless Telecommunications, an investment firm based in New York. The firm may hold positions in companies featured in his columns. The opinions expressed in the columns are personal views of Mr. Kuittinen and they should not be interpreted as investment advice.

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