N8: Nokia's New Flagship Phone Not Working So Well

Part of the potential turnaround of the world's largest handset company, Nokia (NOK), was already in place when new CEO Steve Elop was hired from Microsoft (MSFT). The firm had developed its own iPhone and BlackBerry competitor -- the N8. The N8 was to be Nokia's super-smartphone. The handset is based on the widely used Symbian 3 OS, which competes with systems from Microsoft, Apple (AAPL), Research In Motion (RIMM), and Google's (GOOG) Android.

It turns out, however, that the N8, a complex piece of consumer electronics, has a simple Achilles' Heel. Its battery does not always work. Some of the handsets simply switch themselves off. According to Reuters, "The success of the N8 -- Nokia's first real challenge to Apple's iPhone, more than three years after its launch -- is seen as crucial to Nokia's profit margins in the current quarter, analysts say." Nokia claims the number of units affected should be small.

The N8 is an impressive handset. It has a 12 megapixel camera with Carl Zeiss optics and Xenon flash. It can access local and global Web TV services that deliver TV programs, news and entertainment from channels such as CNN, National Geographic, E! Entertainment and Paramount directly on the home screen. It allows people to update their status, share location and photos, and view live feeds from Facebook and Twitter in a single app, and it has 16GB of built-in storage space.

An unlocked version of the N8 can be bought in the U.S. for $549. That price drops in most countries when the handset is married to a wireless plan.

Nokia has, by most measures, over a third of the global handset market. It also has a flagship product that apparently does not work very well.