Apple Inc.’s (AAPL) iPhone is a major success for the company. The iPhones sales were the major growth driver for the company during the third quarter of 2009. iPhone unit sales were 5.2 million during the third quarter, representing 626.0% unit growth over the year-ago quarter. But Nokia (NOK), the largest mobile phone manufacturer of the world is making strategic moves to counter the ever increasing popularity of Apple’s iPhone.
 
Nokia recently came up with its N97 smart phone to compete with Apple’s iPhone. However, many believe that N97 is not a very good substitute and considers the product’s touch screen feature less sensitive. But Nokia is changing its business strategy slightly and providing added features like maps and music to lure customers.
 
Nokia is trying to strengthen its position in the smart phone market by releasing a new product with a Linux operating system. This apart, the company has plans to sell net books and mini computers. This shows the company’s intention to increase its product portfolio and enter the computer segment where Apple is an old player. We believe this is a counter move by Nokia, a reply to Apple’s decision to enter the smart phone space.
 
Currently Nokia is losing market share to Apple and Research In Motion (RIMM). We believe that although Apple has received instant success with its iPhone, Nokia has many years of experience in manufacturing mobile phones. Consequently, we expect that the company will come up with smarter smart phones and will gradually regain market share.
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