Nokia Takes Strides

Asked about the hotly anticipated iPhone from Apple (AAPL Quote) due out next month, Simonson said it "presents real competition" for Nokia. But he says the multimedia minicomputer device also "further validates" the idea that people will pay more for these devices.

"People will pay more than $49," says Simonson.

The new Nokia N95 with a video and music player, 5-megapixel camera and full Web browser "is the best example of that," he says. Phones like these will be successful as they take sales from adjacent markets like digital cameras, iPods, and laptop computer sectors, he adds.

"We are already out there. We've been doing this. We aren't playing catch up," says Simonson, referring to the looming iPhone threat. "We'll take competition as it comes."

Nokia shares rose 44 cents to $26.91 in early trading Wednesday.