Nokia's cheap phone tops electronics chart

By Tarmo Virki

HELSINKI (Reuters) - The design team that conceived Nokia's new handset in 2002 called it simply "Penny", a modest nickname for what would five years and 200 million units later become the world's top-selling consumer electronics product.

The Nokia 1100 hit the market in late 2003, just in time to catch a major growth wave in emerging markets like China. With a torch light, no-slip grips, and a dust-proof case, the little phone was made for the new growth regions.

Nokia said on Thursday that the entry-level 1100 and its heirs had surpassed the 200 million-unit milestone. It also unveiled seven new models, all priced below 100 euros ($136), to seek to emulate their success.

In the consumer electronic charts, Apple's iPod reached the 100 million mark last month, Sony's PlayStation 2 had sold 115 million by end-2006 and Nokia's earlier top seller, the 3310/3330, sold 126 million units up to its retirement in 2005.

In 2002, the industry was still suffering a dot-com hangover, with sales in developed markets falling for a second straight year. Emerging markets, however, were taking off.

Annual handset sales in developing markets have grown more than three times since 2002, compared to just 62 percent growth in developed ones, said Strategy Analytics analyst Neil Mawston, adding that 65 percent of all handsets made this year will be sold in emerging markets.

Nokia says with growing wealth lifting emerging market demand for high-end phones, its early forays in these regions are yielding benefits beyond the entry-level segment. India and Russia are now among Nokia's largest high-end phone markets.

"We have evidence that people who have got their first Nokia, they stay with Nokia," said Soren Petersen, head of entry business at Nokia's mobile phones unit.