Former Nokia software team unveils its first smartphone

HELSINKI Mon May 20, 2013 11:28am EDT

HELSINKI May 20 (Reuters) - A group of ex-Nokia software developers unveiled its first smartphone on Monday, aiming to prove their former employer wrong by making a success of a technology dropped by the Finnish mobile phone maker.

Jolla was founded by Nokia's former MeeGo software team that was shut down after the company decided to switch to Microsoft's Windows Phone software in 2011.

With just 70 employees and 11 million euros ($14.11 million)in venture financing, Jolla joins a handful of boutique operating systems such as Ubuntu which together have less than a one-percent presence in the mobile phone market.

Start-ups such as Jolla face a tough task breaking into the smartphone market. Google's Android operating system and Apple's iOS together account for 92 percent of all shipments, according to data from industry research firm IDC.

Even Windows Phone and BlackBerry OS trail far behind the top two with a mere 3 percent share each.

Jolla chairman Antti Saarnio said the Jolla's openness in allowing users to download Android apps would differentiate it from others. He said the dominance of the top two players wasn't necessarily permanent.

"In the long run, if someone brings fresh and new ideas, eventually, the market changes."

The new Jolla phone, priced at 399 euros ($510), runs on the MeeGo-based Sailfish operating system and will also be compatible with Google's Android applications in a clear break from Nokia.

The phone comes with a 4.5-inch display and 8-megapixel camera. It will also be 4G-capable, depending on market. The Jolla will go on sale in the fourth quarter, the company said.

The company said it planned to focus on the Asian market, as a rapid growth in the region's middle class is fuelling demand for smartphones. It also plans to raise 30 million euros via convertible bonds in June.

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