Finnish mobile phone maker Nokia's move to provide a free navigation service in China is expected to boost the sale of navigation cellphones in the country, experts said.
That may also help Nokia maintain its dominant position in the country as users turn to CDMA and TD-SCDMA handsets, a market in which the Finnish firm does not have a significant presence.
Nokia Oyj, the world's biggest maker of mobile phones, said on Thursday that the company would offer the free navigation service on its Ovi Maps application in 74 countries and regions.
The company said about 20 million Nokia handset users could use the service right now, and it expects to sell 80 million navigation smartphone handsets globally in the next 18 months.
David Tang, vice-chairman of Nokia China, said he expected the launch of the new service to significantly boost the company's smartphone sales in China.
"We have seen great interest from Chinese users in the navigation service," he said, adding that the country is Nokia's largest single market for smartphones.
According to figures from research firm GFK, shipments of navigation cellphones reached about 13 million last year in China, up from around 5 million in 2008. That accounted for about 7 percent of the country's total cellphone market.
"Navigation cellphones have presented a strong challenger to other navigation devices during the past few years, but their penetration has been limited in China mainly due to their high price," Pang said.
He said Nokia's move to make its own navigation service free will significantly reduce the cost of navigation cellphones in the country.
Although there are no official figures on sales of navigation devices in China, industry analysts expect market turnover to reach 10 billion yuan this year.
Pang said Nokia's move would accelerate the trend of navigation cellphones replacing similar devices.
Nokia bought Chicago-based Navteq in 2008, acquiring a maps database to compete with Google Maps and navigation device companies such as TomTom NV and Garmin Ltd.
According to Gartner, Nokia's global market share fell about 3 percentage points to 39.3 percent in the third quarter, as new competitors such as Google and Apple Inc offered free navigation services.
In China, Nokia's market share declined from 40 percent a year ago to about 35 percent by the end of last year, as China Mobile and China Telecom aggressively pushed their own 3G services that are based on technologies that only a handful of Nokia handsets can support.
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