Nokia ends production of its only WiMax device

IDG News Service - After selling them for just a few months, Nokia Corp. has decided to stop making its N810 WiMax Edition handheld computer.

Nokia unveiled the device, the only one from the phone giant that uses WiMax, in April last year. The WiMax Edition uses the same hardware and software as the previously introduced N810, which employs Wi-Fi to connect to the Internet. The devices are larger than typical cell phones but smaller than laptops and run the Maemo Linux-based OS2008 operating system.

When Nokia introduced the WiMax Edition, it expected to start selling it around the middle of the year near the same time that Sprint planned to launch its Xohm WiMax network. However, Sprint delayed its launch, introducing service in its first market at the end of September. Many online reports show Nokia's WiMax devices first becoming available in October.

Nokia has now stopped making the WiMax products because they have reached the expected end of their lifetime, said Doug Dawson, a Nokia spokesman. The N810 platform is about 18 months old, he said. Dawson did not say whether the Wi-Fi enabled N810 would also be discontinued.

The WiMax Edition models that are already in the sales channel will be available for consumers to buy, he said. Both the WiMax and Wi-Fi versions of the N810 are still available for sale on Nokia's Web site.

Dawson would not say if Nokia was readying other WiMax devices but said the company would continue to follow the market.

The N810 WiMax Edition was probably ahead of its time, said IDC analyst Godfrey Chua. So far, Sprint has launched WiMax only in Baltimore. As a result, most WiMax customers will use the network as a home Internet connection via laptops or desktops rather than as a mobile network they can access on the road.

Nokia may have also decided that the market for WiMax users in the U.S. is just too small right now. "They play a volume game, and I just don't think the volume would be there," Chua said.

But the decision to cut the WiMax device could be a signal of a larger shift away from WiMax at Nokia, said Nadine Manjaro, an analyst at ABI Research. "They struggled with the network so maybe they decided because of the downturn to change their strategy," she said.

She's referring to Nokia Siemens Networks' loss of a contract to build the Xohm network in Dallas. Sprint initially announced that Nokia Siemens would build the network, but Samsung ultimately did. Many observers speculated that Nokia's equipment wasn't ready in time so Sprint turned over the contract to Samsung, Manjaro said.

"Nokia Siemens did struggle with their product so they might say they'll put their efforts on LTE rather than try to do both," she said. Long-Term Evolution is the next-generation mobile technology that the majority of mobile phone operators plan to transition to.

Nokia Siemens wouldn't be alone, if it is indeed shifting away from WiMax. Alcatel-Lucent, which Manjaro considered a leader in the market, recently said it planned to reduce spending on WiMax. Both companies may be deciding that they need to focus their efforts under stress from the faltering economic conditions, she said.

Peter Sayer in Paris and Stephen Lawson in San Francisco contributed to this report.