Nokia Netbook Motives Unclear, Success Uncertain

The exact details on Nokia's Booklet 3G won't be confirmed until the rollout becomes official at Nokia World on Sept. 2. For the time being, eager customers can expect at 10-inch netbook built on the Intel Atom processor and equipped with the usual connectivity options, including 3G/HSPA and Wi-Fi.

The hardware will weigh about 2.75 pounds and is less than an inch thick. Those specs seem to put the Nokia Booklet 3G in direct competition with other netbook makers, such as Asus, Acer, Hewlett-Packard and Dell.

But Jack Gold, president of technology research firm J. Gold Associates, doesn't think it's quite that simple. Instead, he suspects that Nokia's decision to offer the Booklet 3G is a shrewd strategic move aimed at shoring up its position in the mobile device market.

"Nokia is not trying to move into the extremely competitive market for PCs in general, even though it describes the Booklet 3G as a mini-laptop. What it is doing is moving to protect its key markets," wrote Gold. "Nokia has close and long-term relationships with virtually all the important carriers worldwide. In this regard, it is logical for them to provide devices to these carriers beyond just phones."

Netbooks are being subsidized by telecoms in an attempt to entice more users into signing up for a monthly deal. Sprint and Best Buy teamed up to offer subsidized prices on the hardware. AT&T is offering customers three choices of netbooks. Not to be left out, Verizon Wireless is also offering the hardware on the cheap.

Sprint and Best Buy customers can get their hands on a Compaq netbook; AT&T is offering choices of Dell, Acer or Lenovo; and Verizon is offering to subsidize an HP model. Despite the fact that each offering is different, there is a common thread: None of the netbooks being offered are made by Nokia.

Gold thinks the move to offer a Nokia-branded netbook is an attempt by the Finnish phone maker to fight off looming challenges from companies like Asus or HTC.

"Nokia needed to move up to netbooks in order to remain competitive and limit the impact these up-and-coming suppliers have on Nokia's overall business, including its traditional smartphone business which several of these companies are also targeting," wrote Gold.

It's also worth noting that the Nokia Booklet 3G netbook provides a non-smartphone platform for the mobile device maker to push its Ovi Suite. Gold writes that the reception of Nokia's online application and content marketplace has "underwhelmed," but still provider the potential to make money in new markets.

Still, the netbook market is growing, with The NPD Group in July forecasting 33 million units will be sold this year. The market is sizzling but is also crowded and, as Gold points out, Nokia's success may ultimately depend on the hardware.

"[W]hether Nokia is successful or not with the Booklet 3G will depend on the quality of the product," wrote Gold. "But Nokia has now ventured beyond its traditional focus on phones and into the emerging market for netbooks and other Internet-centric wireless devices."