Nokia -- which sold its handset business to Microsoft last year -- recently launched its first Android-powered tablet, the 7.9-inch N1, in China. The 32GB tablet, which bears the Nokia brand but is licensed to and manufactured by Foxconn , costs 1,599 RMB ($258) -- considerably less than Apple 's 16GB iPad Mini 3, which is priced at 2,888 RMB ($466).
Nokia's N1. Source: Nokia
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According to the "N1" account on Weibo , the tablet quicklysold out after 20,000 units were purchased within the first four minutes of availability, with over 556,000 more orders still waiting to be filled. Those figures represent a major improvement over the tepid market response for the Lumia 2520, the Windows RT tablet Nokia launched for $399 in late 2013.
Does the N1 represent a major comeback for Nokia in tablets and a viable threat to Apple's iPad Mini 3, or will this premature hype fizzle out?
Deconstructing the hypeFirst and foremost, reporting large shipments being "sold out" in short periods of time is a strategy lifted directly from Xiaomi's playbook. Last December, Xiaomi boasted that it had sold out of 75,000 Redmi Notes in eight seconds -- impressive headline fodder which was quickly circulated by tech websites. Moreover, the Weibo account posting the sales figures isn't directly controlled by Nokia.
Nokia's initial sales of 20,000 units also pale in comparison to the two million tablets IDC estimates are sold monthly in China. If it only took 20,000 units to "sell out" of the N1, it means that Foxconn wasn't confident enough to manufacture a larger initial run of the device. But if Nokia actually has over half a million orders to be filled, it would be impressive.
However, we should recall that Nokia's Chinese resellers have a history of conflating preorder figures. Prior to the launch of the Nokia X Android phone, retailers claimed that theyhad lined up a million preorders for the phone within the first four days. It was later revealed that retailers had counted shoppers who merely registered an interest in the Nokia X on a Chinese shopping site, with many doing so to enter a competition to win one. Therefore, we should take Nokia's half-a-million unit figure with a grain of salt until it actually sells through that many units.
Foxconn's (not Nokia's) chance to challenge AppleSince Nokia has licensed its brand and N1 design to Foxconn, the tablet represents a much lower risk to Nokia than its previous hardware devices. Licensing revenue from Foxconn feeds into Nokia's Technologies division, which only accounted for 4.6% of its top line last quarter.
However, the N1 represents a fresh chance for Foxconn -- which has long existed in Apple's shadow as the world's largest electronics manufacturer -- to start booking higher profits by selling its own products.
The N1 is encased in a similar one-piece aluminum body as the iPad Mini 3, but it tops Apple's tablet in several ways:
Impressive specs aside, I doubt that the N1 represents any more of a threat to Apple than other premium Android tablets do for a simple reason -- brand appeal. As we've seen with the iPhone 6, Apple held rivals like Samsung at bay with a combination of lower-powered tech and premium appeal, which gives the company its enviable mix of high margins and unit sales.
Moreover, the N1 looks so strikingly similar to the iPad Mini 3 that it might be labeled an iPad knockoff in China -- which wouldn't be a good selling point in a country which values genuine Apple products as status symbols.
What does the N1 mean for Nokia's future?In the end, the N1 might not steal meaningful market share from Apple, but it could help Nokia slowly rebuild its reputation among mobile consumers.This could give Nokia the confidence to launch its own tablets in the future without licensing deals to book full profits.
Looking further down the road, tablets could serve as a prelude for Nokia's even return to smartphones -- although its deal with Microsoft restricts it from launching new handsets until 2016.
The article Can Nokia's N1 Tablet Topple Apple's iPad Mini 3 in China? originally appeared on Fool.com.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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