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Nokia's touchscreen iPhone rival coming this week
Take the Tube

By Reuters

Published: Monday 29 September 2008

Nokia will unveil its first touchscreen phone this week in a direct challenge to Apple's successful iPhone, two industry sources told Reuters.

LG Electronics, Samsung Electronics and several smaller handset vendors have rolled out their own touchscreen phones over the last two years, while the first handset using Google's Android platform will also have a touchscreen.

But so far, the world's top mobile phone maker, Nokia, has stuck with traditional screens.

Both sources said Nokia would unveil its new phone – code-named 'Tube' - on 2 October at an analyst and media event in London. A Nokia spokeswoman declined to comment.

"The phone is extremely important," said Gartner analyst Carolina Milanesi. "We have been waiting for the market leader to respond to Apple's iPhone for a year and a half now. There is a lot of pressure on Nokia."

Nokia shares hit €13.21 on Friday, down 50 per cent from the start of the year in part because of the slow introduction of touchscreen models.

Milanesi said that the Finnish firm had a history of coming late to the market with innovations and succeeding anyway.

"With 3G they were late, but they got it right. They delivered and are the market leader. They did it with slim phones. They could do it with the touchscreen," she said.

Nokia, which has a strong track record in the lower-end handset market, said in July its touchscreen offering would come this year and be cheaper than rival models in order to tap into a higher-volume market.

"The demand outlook in emerging markets, like India, is good for a cheaper touchscreen phone," said Hannu Rauhala, an analyst with Pohjola Bank.

Kai Oistamo, head of Nokia's devices business, said in July the Finnish firm was committed to bringing a complete portfolio of touch devices to the market, both in the high-end and low-end segments.

"Taking into account the attention Apple has got, and good sales of LG and Samsung touchscreen phones, Nokia has to be there," said Pohjola's Rauhala. "As there is demand, there is no reason to leave it for rivals."

Nokia has used touchscreens before in its internet tablet product range - phone-like devices for web surfing which lack a calling function.

The popularity of touchscreens surged with introduction of the capacitive touchscreen technology, which gives higher clarity of picture and that figures in both iPhone and in LG's Prada and Secret phones.

"Demand for touchscreens in mobile handsets has certainly taken off with the introduction of capacitive touch-based devices," said Andrew Hsu, an official at a US touchscreen technology firm Synaptics.