Technology Rumor of the Day: Nokia - TheStreet

Technology Rumor of the Day: Nokia

Nokia has sealed its plans to enter the netbook race, according to people familiar with the company.
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Nokia's (NOK) - Get Report going nutty for netbooks.

Nokia, the No. 1 mobile phone maker, has sealed its plans to enter the netbook race, according to people familiar with the company.

Some if not all of the production of the new mini-PCs will be handled by one of Nokia's original device manufacturing partners, Taiwan's

Foxconn

, these people say.

The news comes as Foxconn closes in on a deal to lease the former Nokia manufacturing facility in Fort Worth, Texas, according to a

report

in the

Star-Telegram

. Foxconn is one of the world's leading notebook contract manufacturers.

Nokia

hinted

in February that it was at the crossroads of mobile phones and PCs and that it was "looking very actively" at making netbooks.

Skeptics figured the move would get Nokia tangled in an

expensive race to the bottom

against lower-cost manufacturers like

Asus

and

Acer

. But netbooks seem to be an

irresistible opportunity

for PC makers.

Hewlett-Packard

(HPQ) - Get Report

,

Dell

(DELL) - Get Report

and even

Apple

(AAPL) - Get Report

are expected to fashion devices for the bargain-hungry netbook crowd.

Nokia's partnership with Foxconn would help shield the Finnish phone shop from some of the high costs of developing and making an entirely new product. Foxconn could also begin production more quickly than if Nokia took on the challenge alone.

Nokia originally struck a deal with Foxconn a few years ago when it needed a manufacturer to build phones for

Verizon

(VZ) - Get Report

. This is a particularly juicy aspect to the speculation since Foxconn licenses wireless technology from

Qualcomm

(QCOM) - Get Report

.

And as a

story first reported

by

TheStreet.com

last week showed, Verizon has passed at least one netbook through its network testing process in preparation to sell subsidized (read: cheap) netbooks with two-year wireless service contracts.

Nokia would like to regain some business in the U.S., where it has been particularly unbending in its cooperation with telcos. Netbooks could open a new door.