Nokia to Chop Smartphone Portfolio in Half

No. 1 handset maker Nokia is refocusing its smartphone strategy for 2010, and plans to chop the number of new offerings it has in half.

Nokia, originator of the candy bar phone, has seen steady encroachment on its market-leading position from Apple Inc. and Research in Motion Ltd It’s market share fell to 35 percent in the third quarter.

The Finnish giant has seen “really fierce competition certainly in the high end, but we also see it in the mid- to low-end of smartphones increasing,” said Jo Harlow, Nokia’s new smartphone chief, during a Web cast. “We will defend our position, but we believe we also have tools to play offense as well as defense.”

To that end, Nokia plans to halve its smartphone stable—it introduced 20 new models in 2009—to weed out any undifferentiated devices. The sheer array of Nokia options and resulting consumer confusion is one of the weaknesses the manufacturer has faced in an era of iconic devices like the iPhone. It’s an ironic outcome, considering that in the past, Nokia’s big strength was its ability to hit the market with a buckshot approach of having a phone for any type of user.

The company also plans to stick with the Symbian OS, leveraging its installed ecosystem to lower both prices and margins for next year, according to statements made by CEO Olli-Pekka Kallasvuo this week.

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