May 9 (Bloomberg) -- Nokia Oyj, seeking to revive sales of cheaper mobile phones in growth markets such as India, unveiled new software to run its Asha devices and a pact that lets customers use Facebook for free on their handsets.
The software, called the Asha platform, is a revamp of the older S40 program that ran 300 million phones sold last year alone. The updated software will first appear on the new Asha 501, which costs $99 and lets users swipe from screen to screen while multitasking, bringing the functions of cheaper phones closer to higher-end ones such as Nokia’s Lumia.
Nokia sold about 11 million fewer mobile phones in the first quarter than analysts had projected, with sales of the more basic handsets plunging 21 percent to 55.8 million units. Chief Executive Officer Stephen Elop blamed intense competition and said adding newer Asha models and aggressive pricing will help Espoo, Finland-based Nokia win back customers.
“The new Nokia Asha 501 raises the bar for what is possible in affordable smartphone design,” Timo Toikkanen, head of Nokia’s basic-phone unit, said today in a statement.
Shares of Nokia lost 7.1 percent this year through yesterday in Helsinki. The stock has dropped every year since 2007. Finnish markets are closed today for a public holiday.
The Asha 501 allows a user to swipe side to side to multitask between different applications. The Asha 501’s multitasking feature is similar to Nokia’s Lumia smartphones that use Microsoft Corp.’s Windows software, incorporating some of the capabilities acquired when Nokia bought Norway’s Smarterphone AS last year. Nokia said it will start rolling out the phone to 90 countries by June. Future Ashas will also use the new software, while current Ashas aren’t compatible.
“The Asha line is optimized” for second-generation networks, “which 80 percent of the world still depends on,” Elop said today in New Delhi. “India is a bellwether market for new technology and consumer requirements. It’s symbolic that we’re launching this device in India because so much work has focused on the Indian consumer.”
A deal with Facebook Inc. and mobile operator Bharti Airtel Ltd., India’s largest wireless carrier, will allow Asha 501 users in India and Africa to check their account without paying any data charges. MTN Group Ltd., Africa’s largest mobile-phone operator, will “ease access” to Facebook through the Asha 501, Nokia said. Indonesia’s PT Telekomunikasi Selular, known as Telkomsel, will offer a special data plan for Asha 501 users.
While demand for the iPhone and Android devices has made smartphones the fastest-growing part of the market, basic handsets still make up more than half of units sold. That means hundreds of millions of phones each quarter -- a market Nokia dominated until Asian manufacturers such as ZTE Corp., Huawei Technologies Co. and Samsung Electronics Co. started challenging it more aggressively. Nokia is now the No. 2 mobile-phone maker, trailing Samsung.
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