Nokia CEO: IPhone A ‘Big Favor’ To Handset Makers

8:09 am, October 2nd, 2008, Ed Sutherland

The iPhone’s entrance onto the handset scene was a “big favor” to the handset industry, pushing companies to change in the face of Cupertino, Nokia CEO Olli-Pekka Kallasvuo said Thursday.

The comments came as the handset giant launches its 5800 XpressMusic, a touch-screen handset with the Comes With Music service. Like the iPhone, the 5800 offers a 3G network interface, GPS and Wi-Fi.

Nokia’s comments appear to reflect the view of others. “I don’t think a handset maker out there doesn’t believe that,” Kevin Burden, ABI Research’s director of mobile devices, told Cult of Mac.

Just advertising the iPhone has spurred companies to expand services, Burden said. After consumers viewed the first ads showing the online applications and services available through the iPhone, data rates spiked for other handset providers.

“Apple’s advertising educated consumers that they could aspire to do more with their phones than just make phone calls, send text messages, and take blurry photos,” Avi Greengart, a handset analyst at research firm Current Analysis.

As one example, Opera Software’s cell phone browser saw data usage rise due to the iPhone, Burden said.

Other iPhone features adopted by other handset makers include a 12-button touch-screen user interface. Handset makers also realized not just business users would pay for data plans if there were compelling online applications. Cell phone companies discovered, as well that consumers buy handsets even without product subsidies.

Nokia has learned from the iPhone and iTunes synthesis that end-to-end systems work, said Greengart, who was briefed on the 5800.

Although the iPhone and Nokia will both offer touch-screen handsets, that is where most similarities end. While the iPhone is aimed at the high-end market, Nokia’s 5800 is targeting the low-end youth sector.

Another difference is not all touch-screens are created equal. While Apple’s iPhone (and Google’s G1) are capacitor-based, Nokia uses resistor-based technology. At half the cost of capacitor touch-screens, resistor screens are more often found on stylus-based Treos and other handsets, according to the analyst.

The decision by Apple could also limit its success in China or other Asian countries that require character-recognition. The iPhone, however, does well when introduced in countries that use a 27-key QWERTY keyboard, Burden said.

Posted by Ed Sutherland in Apple, News, iPhone | Comment on this article