Stuart Corner
Sunday, 11 May 2008 18:54
Opinion and Analysis
Page 1 of 3
Less than 20 years ago the world's dominant cellphone manufacturer was making, amongst a host of other things, car tyres. Now it's shifting focus again, into services, and gearing up to take on Microsoft and Google.
President and CEO, Olli-Pekka Kallasvuo, told the company's AGM on 8 May that: "Under our renewed strategy, Nokia also is intensely focused on investing in Internet services that will enhance our devices and delight our customers. Over time, these services will become a key part of our core business."
This from a company that enjoys a hugely dominant position in the device market: its 40 percent share of the global market is larger than that of its three closest competitors combined. With such a seemingly unassailable position you might think that Nokia would focus on sticking to its knitting and trying to build ever greater share in a market where the advantages of volume are very considerable. And Kallasvuo, clearly felt the need to explain himself to Nokia's shareholders.
He said Nokia had every intention of increasing its market share: "I want to emphasise that we do not intend to stop at this level [40 percent] and begin defending our share. I am confident that we can and will build on our success...Devices will remain our core business."
Kallasvuo went to boast about Nokia's huge R&D commitment - 27 percent of its workforce are in R&D and it spent 2.6 billion euros last year on device R&D along; about its increasing success in emerging markets, and to hint at new devices in the pipeline. But tellingly he added: "Success in the future will require mastering and integrating a complex set of technologies and services. It will involve partnering with others where it makes sense, and bringing all this together in products and services that improve or enhance our customers' lives...The link created between our devices and our mobile services will enhance our already strong brand, our market share and ultimately our device margins. Expanding into services also is giving us an opportunity to work together in new areas with our operator customers, as their businesses also change."
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