Nokia's PC Booklet Needs Telco Help

NEW YORK (TheStreet) -- Nokia (NOK) takes a plunge into the PC market Tuesday with the introduction of its first netbook computer.

The device, called Booklet, runs on the new Microsoft (MSFT) Windows 7 operating system and Intel's (INTC) stripped-down Atom chip. The slim metal body appears to some a close approximation of Apple's (AAPL) MacBook and boasts a 12-hour battery time. The Booklet includes GPS and WiFi and 3G wireless, which is expected to be sold through a telco partner like AT&T (T), though no carrier has been named yet.

Nokia is expected to unveil the Booklet at a media event in New York Tuesday.

Nokia Booklet's Price Problem

For Nokia, netbooks represent a bold if not late strategy to claw back some of the business it has been losing in the smartphone market to Apple and Research In Motion's (RIMM) BlackBerry. The Booklet is the first of a range of mobile computing devices Nokia is expected to have this year and later next year. This summer, Nokia introduced a handheld mobile computer that uses a Linux-based Maemo operating software.

Nokia hired contract manufacturer Foxconn to produce the Booklet in time for the holiday gift-buying season. But Nokia's late entry into the netbook market comes two years after low-cost producers like Asus and Acer have dominated the segment.

The price of the Booklet hasn't been disclosed yet. But so far, telco-subsidized netbooks have been only modestly successful because the data plans run about $1,200 over the course of a two-year contract.

Nokia's venture into the computer market could prove challenging as it tries to find a fit between cheaper netbooks and a host of sleeker more powerful notebooks from Dell (DELL), Hewlett-Packard (HPQ) and Apple.

Palm's (PALM) brief and brutal failed experiment with Foleo was a similar effort by a phone maker to expand beyond smartphones into netbooks. For the Booklet to succeed, Nokia needs the support of telcos, an area where the Finnish phone giant has been particularly weak.