Nokia CEO flags shift into services

Stuart Corner
Sunday, 11 May 2008 17:54

Opinion and Analysis

Today to a giant like Nokia these developments present no immediate threat but as Kallasvuo said: "Some have asked why Nokia reorganised when our business has been going so well. In other words, 'if it ain't broke, why fix it?' More often, companies reorganise only when  they are forced to, long after a shift in the marketplace has made their business model obsolete.  I believe that it is best for Nokia to transform itself 'ahead of the curve'  to better position our company to take advantage of new growth opportunities."

The Nokia of today owes much to Kallasvuo's predecessor, Jorma Ollila, who became CEO in 1992 and took the strategic decision to divest all other businesses and focus solely on telecommunications. He left to become chairman of Shell in 2006 and was replace by Kallasvuo who has already done much in preparation for transforming Nokia 'ahead of the game'.

Under Kallasvuo Nokia has made a string of 'services related acquisitions: online music distributor Loudeye in August 2006; media sharing technology Twango in July 2007; mobile advertising technology and services company Enpocket in September 207; digital mapping company Navteq (announced in October 2007 and still pending) and, most recently, in January 2008, Norwegian software company, Trolltech in a move that it said would accelerate the implementation of its cross-platform software strategy for mobile devices and desktop applications, and develop its Internet services business.

It's  unlikely he's done acquiring, but then neither have his new competitors. Microsoft's so-far failed bid to acquire Yahoo! shows how drastically the market is likely to be reshaped in the not too distant future as major players seek to cover all the bases - devices, software, content and services in an increasingly converged world.