Nokia, Samsung step up smartphone battle

The world's two largest cellphone makers, Nokia and Samsung Electronics, have unveiled their latest attempts to keep pace in the battle with smartphone rivals like iPhone and Blackberry.

Nokia said on Tuesday it has started deliveries of its top-of-the-range N900, while Samsung announced it will launch its own open mobile platform, bada, in December as it tries to make up for a late start in the smartphone market.

Nokia and Samsung together sell around 60% of all cellphones globally but have lost ground against rivals Apple and RIM in smartphones.

The N900 model is Nokia's first phone running the Linux Maemo operating system, which analysts see as key for Nokia to regain ground in the coming years.

"The Maemo platform, which powers the N900, reflects Nokia's need to replace its legacy software platforms with something more powerful to compete with Apple and others," said Ben Wood, head of research at British consultancy CCS Insight.

"Samsung's announcement of bada shows it has also identified the same requirement. The big question is, does the mobile phone world need yet another operating system?" Wood said.

While Nokia has lost ground in the smartphone business, it is still the world's largest smartphone maker by volume. However, Samsung's volumes are well behind Apple, RIM and HTC.

High-end products are important for Nokia because the company has not only lost market share there, but its average selling prices have declined faster than the industry average.

Goldman Sachs has said it expects Nokia's value share - a measure reflecting average prices and underlying market share - for phones costing more than USD 350 to decline to 13% this year from 33% just two years before.