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Nokia 7650: smart phone, shame about the price

Chicken and Egg

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It's a phone and it's a camera, all in one. It'll cost you €550 (£340)* and you can get one in six months time.

That's all you need to know about the Nokia 7650, which despite months of hype and breathless gush from ... uh, well people like us, actually, is simply a fancy phone.

But Nokia summoned 300 journalists and analysts to the launch in Barcelona, and Chairman and CEO Jorma Ollila describes it as Nokia's most important launch of the year.

So what gives?

Well, for a start it's important simply because all the interested parties - including rival handset manufacturers, and even more so the carriers - desperately need it to be a success. Simple voice phones are becoming a throwaway commodity, and terminal manufacturers have seen handset sales dip for the first time ever.

Even more than the phone makers, though, the cash-strapped networks need to raise their ARPUs (Average Revenue Per User) to justify the vast cost of investing in the infrastructure, and in many cases, crippling 3G taxes. So everybody needs to earn a dime.

The pitch

Here's how everyone will make money. Slick new phones such as the 7650 take advantage of Multimedia Messaging (MMS), so we'll all be beaming 30-40k snaps of ourselves to each other. Whether the networks charge by the minute or by the byte, they make more cash, the argument goes, simply because we're besotted with the idea of texting each other.

And (we're keeping track of the argument here) exchanging a quick snap is simply an extension of what's already the world's most popular P2P network. SMS text messaging.

In a touchy-feely presentation, the Nokia boss talked of the immediate emotional impact of receiving a personal photo, and promised that by the end of next year half of Nokia's handsets would be MMS enabled.By the end of 2003, said Ollila, all new Nokia phones will be MMS devices: which is a commitment to make every mobile phone either a fully-fledged camera or a picture viewer.

The phone

The Swedish sites which scooped the first pictures of the new device were spot-on.

First impressions are of a remarkably compact and light device (it really doesn't feel its 154g). A cover slides down to reveal a small keyboard at the front, and uncovers the camera aperture at the back. At which moment the colour display turns into a live viewfinder, just like a 'real' digital camera.

From then on you work your way around using a tiny joystick, and the familiar Nokia buttons and an additional Menu key (it isn't a touch screen, so the buttons are all you've got). The entire UI is very well thought out, with that very discreet joystick the centrepiece.

The software has the function-centric Symbian hallmark, so as soon as you've grabbed a snapshot, a Send-To menu option pops up to invite you to send the picture via infra red or Bluetooth to another compatible device, or via SMS aka MMS, or via email. And off you go.

It's also a full PDA, and although it cuts no corners with the PIM suite, which is the time-tested Psion Series 5 software in a 2002 guise, you can only input text via the numeric phone keypad. European teenagers raised on text messaging will doubtless be able to knock out 160 words per minute on one of these, but us older users will struggle to find it an adequate replacement for a true character recognition device. Fortunately, even on these prototypes, the software feels snappy.

It's promised to be a 2up, 2 down GPRS device, but won't initially be triband, with 900/1800MHz GSM only. It'll support HSCD, up to the theoretical (should we say mythical) 43.2 kbits/s.

The catch

There's only one, really: the price. When most phone users expect the handset to be free, and when decent cameras can be found for less than $100, $600 is a lot to pay for that piece of instant enchantment. Put another way, if the device was $99, and subsidised by the network as phones always have been, we've little doubt the world would beating a path to Nokia's door: because these are a lot of fun.

As it is, we're back to the great convergence chicken and egg question, which is that the networks don't want to subsidise the phones even though the prize is increasing ARPUs in the long run. You can hardly blame Nokia for not swallowing the difference itself: those 'free' GSM phones have always been expensive little real-time 32bit RISC computers, that cost £150-£300 of real folding stuff to make. Giving stuff away for less than cost isn't an option, these days.

Until the carriers agree to subsidise these smartphones, they may as well dream of plump ARPU fruit falling into their laps, because we can't see a market developing with terminals priced like this. And the price falls, the splendid 7650 will remain a niche device at best.

In Japan, fourteen camera phones like this one are available, half of them integrated all-in-one devices, and the rest bundled with a plug-in camera. The devices sell with a year's airtime from around 8300 yen ($67), with most deals below $100.

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* Apologies for the startling error in the original draft, which was caused by using the incorrect exchange rate. We're obviously not getting back to the EuroZone often enough.

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