As expected, Nokia (NOK) finally confirmed its entry into the netbook segment. The netbook named “Nokia Booklet 3G” will have a 10 inch screen, WiFi, Bluetooth, GPS and 3G Wireless access. Most importantly the netbook will run on Microsoft (MSFT) windows and Intel’s (INTC) Atom processor.
This shows the company’s intention to increase its product portfolio and enter the computer segment. We believe this is a counter move by Nokia, a reply to computer manufacturers’ decision to enter the smart phone space. The netbook market is growing very fast and has number of players including Hewlett-Packard (HPQ), Lenovo, Acer and Asus. This could signal a battle between computer/laptop manufacturers and mobile phone manufacturers as each one is trying to venture into another’s business.
Netbooks are internet devices, which fall in between smart phones and laptops. So, a natural progression for the smart phone makers is to venture into the netbook market. On the other hand computer makers like, Dell Inc. (DELL) ventured into the smartphone business and introduced its first smart phone in China while Asus also plans to introduce its first smart phone very soon.
Nokia has a strong distribution network and has a reach in all major markets around the world. So marketing the netbook will be easy for the company. A research firm Displaysearch expects netbook demand to grow by 66% in 2009, compared to just 3% for notebooks. Although it needs to be mentioned that expected 2009 netbook shipments of 27 million units is less than the 133 million units shipments expected for notebooks.  So growth in netbook demand will be there, but competition will be intense, as the market will be flooded with netbooks offered by major players. Although Nokia has the reach and the advantage of its brand name, it has to survive the competition to make its place in the market.

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