Nokia ‘Tube’ Will Be All About Mobile Service

Nokia won’t just beat Research in Motion to the touch screen punch but will be making a statement about its mobile device services strategy as it launches “Tube,” its newest smartphone, in London today.

According to one research analyst who requested anonymity, Tube will illustrate how the Finnish handset maker will be utilizing mobile services going forward — a competitive aspect that could push smartphone a peg above Google’s G1 that debuted last week.

Such differentiation would surely help Nokia in its quest to grab greater market share and traction in the US. It will also ratchet up what’s clearly an already competitive industry headed into the lucrative holiday shopping season.

There are currently over 150 smartphone brands worldwide with about 1,500 active models on sale on store shelves, according to research firm Strategy Analytics, which predicts that smartphone shipments will grow over 80 percent in the fourth quarter of 2008.

Nokia’s “Tube” will feature a sleeker and sexier design than the Google G1 device, according to the analyst who previewed the device two weeks ago.

While the G1 is very iPhone-like in look and feel, the overall form factor look didn’t spark enthusiasm from all corners. In comparison the new Nokia smartphone is a “much more eye catching design,” said the analyst.

Yet unlike the Android-based device, Nokia’s newest handset is not being viewed as an iPhone killer. Analysts are not convinced US consumers will embrace Nokia’s Symbian software environment, as many have not yet been introduced to the platform, and while the touchscreen feature will keep Nokia up along the iPhone in terms of design achievements, the Tube’s user interface experience is unproven.

“This isn’t going to be better or worse, just another device falling into the iPhone category,” Jeff Kagan, telecom analyst, told “We’ll have to see how well it works, how much easier it is to use and how much it will help Nokia which has been lagging in this space.”

Nokia (NYSE: NOK) is scheduled to debut Tube in London at an event dubbed Nokia Remix about 1 pm EST.

Smartphone market growing competitive

While the handset maker declined to provide specifics the launch is latest in a series of strategic moves by Nokia to grab deeper traction in the U.S. smart phone marketplace that’s quickly filling up on devices featuring touch screens, location-based services and music subscriptions.

In late August, Nokia debuted three new models in its Nseries line of phones, all of which arrive “unlocked” — without being tied to a mobile carrier.

The unlocked aspect drives handset prices upward as carriers typically will subsidize a handset’s cost if they can tie a subscription plan to the device sale.

But price doesn’t seem to viewed as a market hurdle for Nokia given the new Nseries phones are retailing between $400 and $900. Nokia would not comment on whether there is a carrier partner for the Tube, or provide an expected retail price.

Google’s G1 arrived cheaper than anyone expected. Its $179 cost with a two-year-contract obligation is $20 below the current iPhone 3G price tag. The G1 will retail for $399, according to the carrier, the U.S. unit of Deutsche Telekom.

On the music feature side Nokia in early September extended its music features beyond its music store to a subscription offering unlimited downloads for a year.

The fact that Nokia is now focused on pushing touch screen technology is no surprise to industry watchers.

“The touch screen is not passé as it’s still a future technology,” said Kagan, noting that while the iPhone offers an innovative touch screen experience there is room for improvement.

Clearly enterprise smart phone leader RIM (NASDAQ: RIMM) sees that opportunity. It plans to push out its own first touch-screen device by year’s end.

The Blackberry Storm 9530 maybe RIM’s biggest shot yet at gaining market share from Apple’s popular iPhone.

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