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Nokia Should Dump U.S. Smartphone Business, Sell Netbooks Instead

Nokia introduced its N900 smartphone to reporters and developers at its New York flagship Friday, albeit with some vital pieces of information missing, such as pricing, availability date, and wireless carrier.

A few things, however, are quite clear. The N900 runs on Nokia's "other" operating system, Maemo, which is 80% based on Linux and is designed for better applications processing, storage, and browsing than typical smartphone operating systems. Nokia has put a lot of thought and effort into producing a device that integrates modern computing applications, such as the ability to run multiple chats simultaneously, and video capability from video streaming technology vendor Qik.

Tellingly, Samir Agarwal, Nokia's head of its Maemo operations, called it "a computer that also happens to be a phone." He added that Nokia wanted to design a tool that corresponds to the reality that "people are always switching back and forth between applications," and so added "multitasking capabilities that are very visible."

One way the N900 accomplishes this is by setting up four separate user interfaces that users can toggle between and customize as they wish. Agarwal said the device is close to being a netbook and added, "I'm not sure what a smartphone is."

Well, one characteristic of a smartphone, Samir, is that it has a carrier, often with a subsidy to soften the blow of the estimated $700 price tag. Another is that it's, you know, available in stores. Not only could Agarwal not say that it will be available in time for the holiday shopping period, he acted as if that were an entirely secondary consideration. For a vendor beset with product delivery delays, his was a rather lackadaisical response, couched in truisms about not shipping the N900 until it's got all its bugs ironed out (we will sell no whine before its time?)

But the fact is that by the time the M900 hits store shelves, it will be competing with not only Apple's iPhone, Palm's Pre and Research in Motion's second take at the Storm, but the first of what figure to be many Droid phones, all of which have serious brand recognition in the United States. By the time Nokia gets around to reintroducing the N900 -- this time with pricing and a carrier -- all the oxygen will have been sucked out of the market by the likes of Motorola, HTC and LG, running on Google's Android.

Am I selling Nokia short?

I know that Nokia is a major international brand, but then again, so is Peugeot. While I haven't lived overseas in a little over a decade, last I know, eleven out of ten cars on the street in North Africa are Peugeots. That doesn't make them very popular here, though, and after taking their best shot, Peugeot has essentially given up on the U.S. market, at least where cars are concerned (bicycles are a different matter).

On the other hand, the netbook market is not only very new, but the market leaders have little or no brand recognition in the U.S., no disrespect intended to Acer and Asustek. Dell, HP, Intel and Qualcomm are among the other players in this market, but while they are established brands, have yet to demonstrate they can dominate this category. In other words, it's still not too late for Nokia to jump in this game.

And Agarwal said himself about the N900, it's a computer that also happens to be a phone. No other netbook can make that claim, and that in itself is reason enough for Nokia to like its chances as a netbook vendor. Just forget that whole smartphone thing, let users pick whichever carrier they like for voice and data services, and market the device as an ultraportable computer with telephony built in.