Nokia unveils its cheapest 3G phone

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Mon May 18, 2009 10:34am EDT
By Tarmo Virki

Nokia unveiled three new cell phone models on Monday, including the cheapest 3G phone to date from the world's top handset maker.

The new 2730 Classic is expected to retail for 80 euros ($108), excluding taxes and operator subsidies, and go on sale from the third quarter of this year.

An analyst said some smaller rivals might sell 3G phones for less, but this was the cheapest model on the market from any top-tier manufacturer.

"The pricing is very, very interesting, especially for operators trying to migrate users to 3G. It will make a difference to sales," said Gartner analyst Carolina Milanesi.

The handset market saw its worst ever quarter in January-March, leading Nokia to report its first ever quarterly pretax loss.

Nokia's wide offering has kept it ahead of its traditional rivals like Samsung Electronics, but the Finnish firm has lost market share at the top end of the market to rivals like Apple and Research in Motion.

"We knew already that Nokia can do affordable devices. What we need to see is what it can do in the high end and how margins are going to develop if it continues to push into the low end," Milanesi said.

Nokia also unveiled the 7020 and 2720 Fold models, which would sell for 90 and 55 euros, respectively.

The new 3G handset, with Nokia's traditional candybar design, is targeted at entry-level prepaid users in both developing and developed markets.

"Mobile operators worldwide are crying out for more low-cost 3G handsets which enable them to reduce their expensive subsidy budgets and target high-volume mass-market consumers," said Strategy Analytics analyst Neil Mawston.

"Entry-level consumers in regions such as Asia and Africa will make up the next major wave of growth for the 3G handset industry and the 2730 Classic helps to address that segment," Mawston said.

(editing by John Stonestreet)