Nokia says starts shipping flagship N8 model

HELSINKI (Reuters) - The world’s leading cellphone maker, Nokia, said on Thursday it has started to ship its flagship smartphone model the N8, boosting its share price.

Slideshow ( 4 images )

Shares in Nokia were 3.5 percent stronger at 7.46 euros by 0951 GMT (5:51 a.m. EDT), outperforming the STOXX Europe 600 Technology index, which was 0.7 percent up.

“The reaction is surprisingly small when looking at how the share price has developed in the past week,” on shipping speculation, said Nordea analyst Sami Sarkamies.

Last week Nokia said it had delayed by a few weeks deliveries of the N8 to clients who had pre-ordered, hitting its shares on the day chief executive Stephen Elop started at the helm of the company.

The N8 is seen by analysts as Nokia’s first real challenge to Apple’s iPhone, more than three years after its launch. Its success and timing of its introduction are seen crucial to Nokia’s profit margins in the third and fourth quarter.

Sarkamies noted the new flagship device was expected to have a bigger impact on profitability in the fourth quarter than in the third.

FIM analyst Michael Schroder said: “N8 is a step forward for Nokia when considering its portfolio. It is an important device as Nokia attempts to get back to the category of the most expensive smartphones.

“Smartphones is the category that generates the largest part of the result, although in terms of volumes it is still small.”

Nokia said the N8 would be widely available in coming weeks.

“The N8 has received the highest amount of pre-orders in Nokia’s history,” said Jo Harlow, head of the company’s smartphone unit, in a statement.

The N8, first to use Nokia’s new Symbian software, was originally scheduled to reach consumers in June.

In April, Nokia warned the software renewal would take longer than expected due to quality problems, and said that the model would reach consumers by the end of September.

A weak offering of smartphones and problems with software were seen as the main reasons for Nokia replacing Chief Executive Olli-Pekka Kallasvuo with Stephen Elop from Microsoft.

The N8 stands out among its rivals for its 12 megapixel camera, but has a slower processor than Samsung’s leading model, the Galaxy S, and Apple’s latest iPhone.

Editing by Hans Peters and David Hulmes