Nokia(NOK): The Best Chance To Chase The Apple (AAPL) iPhone

The new Apple (AAPL) has plenty of challengers. Samsung has made the “Instinct” for Sprint (S). Early word is that it is selling well. T-Mobile will be the first cellular provider to come out with a handset powered by the Google (GOOG) Android mobile operating systems. RIM (RIMM) will launch new versions of its Blackberry aimed at the consumer market.

The world’s largest handset company, Nokia (NOK) refuses to be bested. Its entries into the high-end handset market will show up this month. The new products will be able to access the internet through fast wireless 3G networks and will have multi-media capacity for music and video.

The new offerings are known as the N79 and the N85. They are important to Nokia because, according to The Wall Street Journal, “Research firm Gartner estimates the market for smartphones increased 29% to 32.2 million units in the first quarter from a year earlier.” The growth rate for the industry as a whole is closer to 10%.

Nokia may be the only company that has a real chance to challenge the popularity of the iPhone both in the US and in almost every major country in the world. With 40% of the total global handset market, Nokia has unprecedented leverage with large carriers.  It can ask for and get access to sales channels which are not available to smaller companies, including Apple. It already has multi-year relationships with companies from China Mobile (CHL) to Deutsche Telekom (DT) to AT&T (T).

It took Apple a number of years to understand that distribution was a critical key to the success of the Mac. Getting the computer into major electronics retailers was just as important as having a “cool” product. Nokia has Apple trumped on the retail distribution front.

If the new Nokia phones have consumer appeal because of their features and prices, the big Finland-based operation can create a level of distribution and marketing for them which may swamp anything Apple can muster.

Douglas A. McIntyre