So-called smart phones allow users to surf the Web, take photos, enjoy music and video and sometimes games, in addition to making calls. Many are priced above $400, before subsidies by mobile carriers.
"The (U.S.) consumer... hasn't had a lot of choice to go out and purchase these kind of higher-end, feature-rich multimedia devices. If that can help that market grow, I think that gives us an opportunity," Nokia CFO Rick Simonson said at the Reuters Global Technology, Media and Telecoms Summit.
The iPhone is Apple's biggest foray yet into the cutthroat $145 billion consumer electronics industry. Apple Chief Executive Steve Jobs has set a goal of selling 1 million units in calendar 2008.
"Don't get me wrong, they will bring some things to the table that we have to be responsive to, but we have been investing in this area or some time," Simonson said. "We are leading in multimedia convergence."
Simonson said Nokia, the world's biggest maker of mobile phones, already makes best-selling multimedia handsets—including the N73 and the N95—that will challenge iPhone when Apple's device debuts in the United States in June.
"It (the N95) is already out there, doing many of the things that people are talking about the iPhone doing. The iPhone is interesting. It's very much a validation of what we've been doing, in terms of saying there is a multimedia device out there that people will pay for," he said.
Apple has said it could eventually sell 10 million iPhones, which play music and video and have a touch screen. The version with 4 gigabytes of flash memory will cost $499, while the 8-gigabyte version will cost $599.
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