Nokia turns to Android for new low-cost smartphones

MWC 2014: Nokia is launching its first smartphones to use Google’s Android operating system as it looks to appeal to customers in emerging markets and turn around its stuttering performance.

Video: The new Nokia X phones which are powered by Google’s Android operating system

At Mobile World Congress in Barcelona today (24 February), the company unveiled the new Nokia X family of phones that Nokia says will offer “Android apps, Microsoft services and signature Nokia experiences”.

The €89 Nokia X will be the first in the range, followed by the Nokia X+ and Nokia XL. However, while the phones will run a version of Android, Nokia has modified the user interface so it resembles Microsoft’s Windows Phone operating system and is putting Nokia and Microsoft software including Bing, Skype and Outlook at the heart of the range.

Stephen Elop, executive vice president of Nokia’s devices and services division, says the launch of the Nokia X range means the company will now offer four tiers of product as it ups the battle with Google to attract the “next billion” mobile phone customers.

“Nokia has connected billions of people around the world, and today we demonstrated how our portfolio is designed to connect the next billion people to great experiences,” he adds.

The decision to make phones using Android is a u-turn for Nokia, which three years ago entered into a “strategic partnerships” that saw all Nokia smartphones run on Microsoft’s operating system. However, that has failed to turn around Nokia’s performance, with its share of the global market dropping to 13.8 per cent in 2013, according to research firm IDC.

Its revenues are also down, falling 29 per cent in the most recent quarter, while its losses hit €201m. Nokia is now selling its handset business to Microsoft for €5.44bn (£4.6bn), including its marketing, operations, sales and design teams. That deal is expected to go through in the next few weeks.

The new Nokia phones are aimed squarely at emerging markets, where Android accounts for up to 90 per cent of the market. The first device, the Nokia X, will go on sale immediately in Asia-Pacific, Europe, India, Latin America, the Middle East and Africa. The Nokia X+ and XL will launch in the second quarter and cost €99 and €109.

Tony Cripps, devices and performance analyst at Ovum, says the Nokia X range will “shake up” the smartphone sector, although it is not yet a game changer.

“Nokia’s strength in developing markets will be a major catalyst for sales of Nokia X, which brings a level of design and build quality to the low-price smartphone segment that is largely lacking today. Other OEMs will be forced to up their game in this key market segment,” he adds.

Read more of our Mobile World Congress 2014 covergage here