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Canalys: The Nokia Booklet Netbook Will Fail

While the majority of us out there are batshit ecstatic about the upcoming Nokia Booklet 3G netbook, market research firm Canalys has a few reasons we should hold off with the prenuptial arrangements and give the Booklet a sharp look over.

One reason has to do with the distribution channels Nokia is expected to use. While Nokia has strong relationships with wireless operators in Europe and Asia, “operators only accounted for 13% of netbook shipments in EMEA in Q2 and the sector is crowded. For Nokia to drive volumes it will also need to make inroads into online and offline retailers, which is an expensive proposition.”

Secondly, Canalys isn’t super excited about price position for the upcoming netbook:

“Judging by the Booklet’s specifications and its aluminium case, Nokia will position it as a premium product, but it will be hard to sustain a high price point. Premium netbooks are a hard sell as their prices overlap with fully functional notebooks. Witness the Sony VAIO range, which has seen its share of mobile PCs in EMEA fall to just 2% from 4% over the last three years.”

Canalys also made a few points concerning the price margins Nokia expects to achieve with the new netbook. Other vendors like “Acer, ASUS and HP” work on slimmer margins than Nokia, which might put the Booklet netbook on weaker footing than expected:

“These vendors operate on far lower gross margins – around 10%, significantly below the 34% Nokia enjoys in its phone business today. Furthermore, the high-volume PC vendors enjoy significant price advantages from both Intel and Microsoft. The only chance for Nokia, or any other vendor, to change the economics of the PC industry will be through an innovative non-Windows platform.”

I can’t help but agree, but way to be a buzzkill, Canalys! It will be interesting to see how the market research firm’s predictions hold up when the Booklet is finally released.

Via GPSBusinessNews.

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