Nokia Needs Fast Reply to Apple Attack

Nokia (NOK) absorbed the blow of a one-two punch from Apple (AAPL) and Texas Instruments (TXN) this week, but the handset maker is expected to struggle until it refreshes its product portfolio.

The first hit came Monday after Apple CEO Steve Jobs unveiled the new iPhone 3G, designed to run on faster next-generation cellular networks. At the company's annual Worldwide Developers Conference, Jobs introduced the new, thinner device to compete with Nokia's handsets, one that includes a GPS system, better battery life, boosted enterprise support and third-party applications.

Jobs went a step further and took a direct swipe at the Espoo, Finland-based handset maker, remarking how the iPhone 3G managed to download a Web site in 21 seconds while the Nokia N95 took 33 seconds to load the same page. The Palm (PALM) Treo 750 took 34 seconds, he said.

Jobs also pointed to the disparities in the way each device displays a full Internet page. "The iPhone 3G is 36% faster than the Nokia N95 and the Treo 750," Jobs said. "Look at what you get: a full Web page on the iPhone and something quite a bit less on some of these other products."

A Smart(er)phone Response

Despite having a winner with its flagship N95 device, which retails for roughly $500 and generates about 2 million shipments per quarter, Nokia needs a competitive response, writes American Technology Research analyst Mark McKechnie, as cell phones become "smarter" and as price points on devices like the Apple iPhone and Research In Motion's (RIMM) Blackberry pull back.