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Nokia One-Ups Apple With \$750 Smartphone

When Steve Jobs announced the iPhone at Macworld in January, eyebrows were raised at the $499 price tag. In a market where carrier-subsidized cell phones routinely sell for less than $100, that's a lot of dough. Now, though, Nokia has gone Apple half-again higher, releasing the N95 for a cool $750.

Launched in North America last week, the N95 is an "all-in-one multimedia computer," according to Nokia, that rivals the iPhone in usability and beats it, in some ways, in functionality. The N95 includes a 5-megapixel camera, a powerful media player, 3G networking over the Cingular/AT&T HSDPA system, and Wi-Fi and Bluetooth, as well as an innovative dual-slide design. It runs the Symbian operating system.

Could the Nokia N95 steal the spotlight from iPhone?

Could the Nokia N95 steal the spotlight from iPhone?

Early results are promising: U.K. mobile phone outlet Carphone Warehouse has a message on its site limiting purchasers to one N95 "due to high demand," and according to Nokia, boutique phone stores in New York City sold out within a day.

Not only has Nokia established that there's a market for high-end phones, but it's also set to give the iPhone a run for its money. Even among the rapturous early reviews of the iPhone, skeptics noted its one-carrier support (the phone will be available only in Cingular/AT&T stores and from Apple), its closed operating system, its reliance on the slower 2.5G network technology, the high price, and so on. The iPhone's "revolutionary" touch screen could put off users accustomed to a cell-phone keyboard. What's more, unlike the N95, the iPhone doesn't support e-mail synchronization with Microsoft Exchange--a deal-breaker for many IT shops.

Beyond the iPhone's shortcomings is the nature of the smartphone market, where six months (the lag between Apple's iPhone announcement and the planned release) is a lifetime. A slew of innovative "converged" devices, from the Samsung UpStage to the HTC Shift to the Helio Ocean, have been introduced since January. Each features much of the multimedia muscle of the iPhone--and all sell for way less than $500.

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