Here’s How Nokia Is Fighting Back with Cheaper Phones

In a struggle to regain lost ground and recover sales of cheaper phones in India, Nokia (NYSE:NOK) revealed a new software, called the Asha platform, Thursday that it hopes will be the boost the company needs after selling 11 million fewer mobile phones in the first quarter than projected, Bloomberg reports.

The success of the new software, called the Asha platform, will determine whether cheaper phones with Internet capability is what will save Nokia. It will first appear on the new Asha 501 and offer Internet access on a touchscreen. The software will also have applications for social media sites and allow users to to swipe from screen to screen when multitasking with these different applications, with a promise that Facebook (NASDAQ:FB) will be free for users’ handsets. These new features that were absent in earlier models will help minimize the distance between that of cheaper phones and higher-end ones.

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Since his hire in 2010, Nokia CEO Stephen Elop, has been struggling to revive the firm that was once the dominant handset-maker. Bloomberg not only reports Nokia selling 11 million less mobile phones than projected, but also marks its loss in shares at 7.1 percent this year, leading to their sixth straight drop. Elop believes that these newer Asha models and pricing designs will help the firm compete with competitors. Phones that have limited smartphone capabilities but are cheaper than high-end models may be crucial to Nokia’s success in the future.

Although smartphones are still the fastest growing sector of the market, basic handsets still account for more than half of the units sold, an advantage for Nokia as most of what it sells are handset phones. The Asha 501 will provide an intermediary between the two, with a reasonable price tag of $99 and limited Internet capabilities. A deal with Facebook will also allow Asha 501 users to access the social network free of cost.

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Nokia, now trailing Samsung as the No.2 mobile-phone maker, promises the availability of the new Asha 501 in 90 countries by June.

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