05 June 2008

Nokia bets Americans want
all-purpose cell phones

In one vision of the near future, Americans will rely on a smart-phone as their all-purpose gadget.

Making calls will be almost an occasional activity compared with using phones for Web browsing, e-mail, photographs, music downloads, shopping, global positioning services and games.

But in another scenario, consumers will stubbornly resist paying for more expensive phones and services that still face technical hurdles, including limited battery power and the need for better networks.

Nokia, the giant Finnish phone maker that has been expanding its Silicon Valley operations, is betting on the first vision as it transforms itself into an Internet company as well as a device manufacturer.

To make that transition, which will hinge on providing easy access to a huge range of digital services, the company is looking closely at research that hints at dramatic changes in the behavior of U.S. consumers. Many Americans may actually be eager to turn their cell phones into a hub for all personal technology.

The current U.S. smart-phone market is dominated by the Research In Motion Blackberry (44.5 percent as of the first quarter of the year), followed by Apple's iPhone (19.2 percent), according to the research firm IDC. Nokia isn't in the top five but says it's developing products and strategies to make future inroads in North America.

One of the most in-depth Nokia research projects involves tracking the keystroke usage of people using its high-end phones - roughly 1,000 consumers per group - in Europe, Asia and the United States. The company also does face-to-face interviewing with customers in more than a dozen countries every month, but the keystroke research is "invaluable to us," said Daniel Shugrue, one of Nokia's marketing specialists.

When Nokia compared keystroke usage by European users to a U.S. group, it got a surprise: Some Americans were using non-calling services and applications at a much heavier rate than the Europeans. That flew in the face of long-held assumptions about Europeans (and Asians) being ahead of Americans in using mobile phones for more than calling.