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Nokia Acquires Feature Phone OS Developer Smarterphone

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Nokia buys Norweigan developer for undisclosed amount to strengthen its feature phone offering

Nokia has acquired a new feature phone operating system as part of its buyout of Norwegian developer Smarterphone.

The move strengthens Nokia’s assault on the feature phone market, which has been a source of positivity amidst its recent struggles in the smartphone arena.

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Smarterphone, which was previously held and backed by Ferd Capital, is a relatively small firm which required just €6.5 million (£5.4m) of investment during its four year lifespan, but its featurephone OS could achieve significant reach given that Nokia’s S40 platform dominates the feature phone market.

The company, which has been acquired for an undisclosed amount, gives Nokia an operating system that boasts a smartphone-like experience on low cost hardware and demonstrates the importance the Nokia is placing on the market.

Nokia has experienced better than expected sales of its lower-end phones and it has reacted by announcing the Asha line of affordable phones aimed at emerging markets in Asia, Africa and Latin America, costing between £52 and £100.

Feature phones accounted for 47 percent of Nokia’s sales in the first three quarters of last year and will continue to remain important as they will form a substantial part of the user base in emerging markets for some time.

Users in these countries are increasingly demanding web access and smartphone-like experiences, despite cost barriers and 2G connections and Nokia has responded by attempting to innovate. Feature phones form a substantial part of Nokia’s aim of getting the next billion people online.

This success is in stark contrast to Nokia’s fortunes in the smartphone market. Despite unveiling its first devices running the Windows Phone mobile operating system, the Lumia 710 and 800, at the Nokia World event in London last October, Nokia has struggled to improve its smartphone market share, which has been steadily eroded in recent years.

In an effort to stop the rot, Nokia and Microsoft agreed a strategic partnership for the Finnish manufacturer to use Windows Phone, but the Lumia 800 has received a lukewarm reception while Nokia continues to post disappointing results.