Nokia bolsters phone lineup

Nokia on Wednesday bolstered its smartphone line-up to better compete with Apple and put a price on the new laptop leading its foray into the fiercely-competitive netbook market.

The handset announcements, the latest moves by the Finnish firm to match Apple's innovation in a sector switching focus to services and software, left some analysts unimpressed.

"Nokia has major challenges on developing user experience, and we might have to wait for a significant improvement until the second half of next year," said Jari Honko, analyst with eQ Bank in Helsinki.

Nokia unveiled three new phone models and said its new Booklet 3G will go on sale for about 575 euros (£500).

Nokia has seen its profit margins drop over the last few quarters as handset demand has slumped, and analysts have worried that entering the PC industry, where margins are traditionally razor-thin, could further depress earnings.

But Gartner analyst Carolina Milanesi said Nokia had no choice.

"Nokia had to do it. You see more and more PC guys getting into the mobile operators' shelves. It's kind of the counterattack, it's not just defensive," Milanesi said.

With the move into laptops, Nokia is crossing the border between two converging industries from the opposite direction to Mac-maker Apple, which entered the phone industry in 2007 with the iPhone.

Nokia will face new rivals like HP, Dell and Acer and some commentators said the market could be too tough to crack.

At the same time Nokia's history has been marked by major steps from one industry to another. In the early 1990s it sold most of its units, including rubber cables and home electronics, to focus on telecommunications.

Nokia said its new top-end N900 phone will sell for 500 euros (£438). The phone, which has computer-like functions, is the Finnish firm's first phone to use Linux software. The unveiling of the phone last Thursday helped to lift its shares 11 percent for the week.

Nokia has been looking for business opportunities in offering services like music downloads or games to cell phone users as the handset market matures, but so far its offerings have had limited traction.

Nokia also on Wednesday announced a long-awaited deal with social networking website Facebook that will link Nokia Maps to Facebook, and allow people to update their location and status directly via a Nokia Ovi account.

The first phone to support the service will be the N97 mini, which will start shipping to retailers in October.

"This deal sees Nokia catching up with rivals such as Apple and RIM. The big win is getting the Ovi brand and its Maps service featured on Facebook," said Paolo Pescatore, an analyst at CCS Insight.

Nokia shares were slightly down in the wake of the announcements at the "Nokia World" event in Stuttgart, having fallen 0.2 percent at 9.40 euros at 1119 GMT but outpacing a 0.9 percent weaker Dow Jones Stoxx Technology index.