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Nokia's N-Gage Gadget Hits Market

When you think of a major Finnish mobile handset manufacturer, GameBoy-like, multi-purpose gadgets don't necessarily come to mind.

But Nokia has announced its foray into the mobile videogame market with the official release of its N-Gage system, which combines a handheld videogame player with a wireless phone, paging functions, a MP3 player and a variety of other features.

Nokia's strategy is to target the avid videogame user in the 16- to 30-year-old market, rather than the kid's gaming segment, a market that Nintendo has dominated with its GameBoy franchise.

As part of the product rollout, Nokia has lined up major videogame publishers for licensing deals to create games for the N-Gage platform. Those companies include Electronic Arts , Activision and Taito.

"New titles coming in time for the holiday season will include such bestsellers as NCAA Football 2004, Red Faction, a special N-Gage version of Tom Clancy's Splinter Cell," Nokia said in a statement. Electronic Arts said FIFA Soccer 2004 would be released for the Nokia N-Gage game deck, which will allow for head-to-head multiplayer gameplay using BlueTooth wireless technology.

The suggested retail price for the N-Gage device is initially 299.99$ and games are expected to cost between 20$ and 30$.

Nokia argues the device not only has phone and PDA capabilities, but also has multimedia paging, FM-quality stereo radio and a MP3 player, and is a reasonable price tag. Nokia says N-Gage's phone technology allows portable videogame players to play each other from anywhere in the world connected via the GSM system.

"Built for active and hardcore gamers, the Nokia N-Gage is the first mobile and connected game deck to feature online high-quality 3D multiplayer gameplay over Bluetooth wireless technology and GPRS," Nokia said.

While Nokia is the first electronics manufacturer to take on Nintendo in the portable videogame market, Sony is working on a portable PlayStation device expected to hit the market in the fall of 2004.

Sony has said its device will have a 4.5-inch screen and will be able to process DVD-quality video. Also, Tapwave recently came out with its Zodiac mobile entertainment console, which is base on the Palm operating system.

Nokia will initially focus on marketing its new videogame gadget phones in Hong Kong, Australia, Singapore and Thailand. The company said it hopes to sell between six and nine million units of the N-Gage handset by the end of 2004.

Nokia is the worldwide leader in the cell phone handset market with a 40 percent market share, selling over 150 million phones on the global market.

Analysts who cover Nokia estimate the start-up costs of launching the N-Gage platform are close to $175 million, and it could be several quarters before the company begins to realize the financial benefits on the product launch.

Nokia is working with some European mobile service providers to offer reduced rates for the new N-Gage devices. Those companies include mmO2 and Telfort of The Netherlands. Nokia made no public statement regarding any discounts given to service providers and retailers.

Nokia said N-Gage will be sold in 60 countries in more than 30,000 electronics retailers.

In a separate announcement on Tuesday, Nokia said it expects the mobile data services market to grow more than four-fold in the next four years. The company said it believes the mobile data services market is close to $47 billion, and speculates it will grow to more than $211 billion by 2007.

Nokia also said on Tuesday it struck a deal with the IMG/TWI, the sports marketing firm about starting a new trial for a mobile multimedia sports service.

"Nokia and international sports marketing company IMG/TWI teamed up to develop the Essential Sports Service to deliver sports images, news, updates and audio commentary to sports' fans mobile phones. In total five operators in Asia Pacific and Europe offered the individually branded services to their MMS subscribers," the companies said.