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.

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