Nokia should focus on Asha as it diversifies its lineup

Nokia is hoping to give sales a much-needed boost by increasing its focus on feature phones and low-end Windows Phone handsets, Reuters reported today. The Finnish manufacturer will look to take on Huawei and ZTE largely in emerging markets by introducing new cut-rate basic phones at Mobile World Congress next week, according to unnamed “company sources,” as well as lower-priced models of its Lumia line of smartphones.

While the Lumia hasn’t been a disaster, Nokia’s all-in bet on Microsoft’s Windows Phone clearly has been a disappointment. Its smartphone sales continued to plummet in the fourth quarter┬ádespite its cozy relationship with Microsoft, according to its January earnings report, and the high end of the Windows Phone lineup has grown more crowded with HTC’s impressive 8X. So diversifying its portfolio with more affordable handsets is a wise move — if not a no-brainer.

But that diversification should also include an increased focus on its Asha line of handsets, which run a feature phone platform (Nokia’s Series 40) but offer smartphone-like tweaks (such as bigger screens and more powerful processors). Nokia sold 9.3 million Asha devices during the most recent quarter, outpacing its Lumia sales and marking an impressive 43 percent increase over the previous quarter. If Nokia truly does plan to target emerging markets with more muscle, it may as well do so with handsets that don’t require it to pony up licensing fees to Microsoft.