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Nokia buys Norwegian startup Smarterphone for low-end push

Staff members speak to trade visitors at the Nokia booth at the CommunicAsia expo in Singapore
Staff members speak to trade visitors at the Nokia booth at the CommunicAsia expo in Singapore

By Tarmo Virki

(Reuters) - Finnish cellphone maker Nokia has bought Norwegian technology startup Smarterphone AS to add more advanced features to its basic cellphone models.

Nokia, left in the dust by Apple Inc and Google Inc in the booming smartphone market, has also struggled to hold on to its lead in lower-end markets, under pressure from Samsung Electronics Co Ltd.

Oslo-based Smarterphone, which has a team of 15 people, has created a software platform which it says enables a smartphone-like user experience on cheap hardware.

"The increasing competition on high-end smartphones makes Nokia's low-end software more important in the future. They need to bring Series 40 to a new level," said John Strand, founder of Danish telecoms consultancy Strand Consult.

Nokia has sold hundreds of millions of basic cellphones running its 10-year old Series 40 software platform, which many analysts say is too basic to compete against smartphones cheaper than $100 running Google's Android software.

A Nokia spokesman said the acquisition is part of the Finnish firm's strategy of expanding mobile Internet usage to a billion more consumers, the second focus -- after revamping smartphone offerings -- in the strategy of Chief Executive Stephen Elop.

Smarterphone investors include venture firm Ferd Capital, and Haavard Nord, founder of Norwegian mobile software firm Trolltech, which Nokia acquired in 2008. Ferd Capital said it has invested a total of 6.5 million euros in Smarterphone since 2007.

(Reporting By Tarmo Virki; Editing by Gerald E. McCormick)