Nokia, seeking to revive sales of cheaper mobile phones in growth markets such as India, unveiled new software to run its Asha devices and a pact that lets customers use Facebook for free on their handsets.
The software, called the Asha platform, is a revamp of the older S40 program that ran 300 million phones sold last year alone. The updated software will first appear on the new Asha 501 and lets users swipe from screen to screen while multitasking, bringing the functions of cheaper phones closer to higher-end ones such as Nokia's Lumia.
Nokia sold about 11m fewer mobile phones in the first quarter than analysts had projected, with sales of the more basic handsets plunging 21 percent to 55.8m units. The company's chief executive Stephen Elop blamed intense competition and said adding newer Asha models and aggressive pricing will help it win back customers.
"The new Nokia Asha 501 raises the bar for what is possible in affordable smartphone design," Timo Toikkanen, head of Nokia's basic-phone unit, said.
The Asha 501 allows a user to swipe side to side to multitask between different applications, similar to Nokia's Lumia smartphones that use Microsoft's Windows software, incorporating some of the capabilities acquired when Nokia bought Norway's Smarterphone last year. The phone will cost US$99 and start rolling out to 90 countries by June, Nokia said. Future Ashas will also use the new software, while current Ashas are not compatible.
A deal with Facebook and mobile operator Bharti Airtel, India's largest wireless carrier, will allow Asha 501 users in India and Africa to check their account without paying any data charges. MTN Group, Africa's largest mobile-phone operator, will "ease access" to Facebook through the Asha 501, Nokia said. Indonesia's Telekomunikasi Selular, known as Telkomsel, will offer a special data plan for Asha 501 users.
While demand for the iPhone and Android devices has made smartphones the fastest-growing part of the market, basic handsets still make up more than half of units sold. That means hundreds of millions of phones each quarter – a market Nokia dominated until Asian manufacturers such as ZTE Corp, Huawei Technologies and Samsung started challenging it more aggressively.
* Bloomberg News