RealTime IT News

Nokia Mulls Bucking Trend With a Notebook PC

The world's top mobile phone maker, Nokia, is eyeing entering the laptop business, CEO Olli-Pekka Kallasvuo said in an interview to Finnish national broadcaster YLE on Wednesday.

"We are looking very actively also at this opportunity," Kallasvuo said, when asked whether Nokia (NYSE: NOK) plans to make laptops.

The comment was the first official admittance of such plans. Rumors have been buzzing about Nokia's possible plan to enter the PC industry since late last year, following the company's buyout of mobile operating system firm Symbian.

At the time, Nokia revealed little about its goals for the software, although it did say it planned to open source the technology and use it to develop new products packed with advanced features. The company has also spoken repeatedly of the growing importance of PC-like capabilities to mobile phone makers.

"We don't have to look even for five years from now to see that what we know as a cell phone and what we know as a PC are in many ways converging," Kallasvuo said. "Today we have hundreds of millions of people who are having their first Internet experience on the phone. This is a good indication."

Nokia's comments come a week after No. 3 PC brand Acer launched a foray into the phone business with eight mobile phone models, joining leader Hewlett-Packard and No. 4 Lenovo in the high-growth space.

While strong profit margins in the smartphone industry attract PC brands, the attraction of the low-margin computer industry is less obvious.

"Nokia may be nervous about entering a market segment that is already heavily commoditized, but it would be in a position to exploit its enormous scale in manufacturing, supply chain and distribution," said Ben Wood, research director at CCS Insight.

"All leading mobile network operators and retailers are adding connected notebooks and netbooks to their portfolios alongside mobile phones. On this basis it comes as no surprise that Nokia is evaluating this segment," he said.

The global PC industry was resilient for most of last year when other technology sectors were ailing, but it too has now been caught up in the deepening economic downturn that has hit demand from consumers and corporate buyers.