Nokia is the global cell-phone leader, with sales of 329 million units in 2009. Yet when it comes to feature-packed smartphones in some markets, including the U.S., analysts say Nokia is under threat from rivals Apple , Research In Motion , and Google.
Case in point: Nokia's "Comes With Music" service, which adds music to the purchase price of a handset, was introduced in 2007 just as Apple's music-playing iPhone was gaining momentum. "Comes With Music" has failed to attract large numbers of users, according to Music Ally, a U.K.-based digital music research firm, even as iPhone demand has surged.
Nokia Chief Executive Olli-Pekka Kallasvuo spoke with Bloomberg BusinessWeek's Arik Hesseldahl on Mar. 16 about Nokia's plans for the U.S. market, its acquisition strategy, and an alliance with Microsoft to create mobile applications for businesses. He also addresses efforts to make Symbian, the operating system acquired by Nokia in 2008, more attractive to software developers.
What do you think of Nokia's prospects in the U.S. in 2010?
We have taken several steps to enhance and boost our position in the U.S. And that adds to the dynamics. One that hasn't gotten much attention is our cooperation with Microsoft in order to introduce and co-create enterprise applications on top of our Symbian operating system. This is a pretty big effort to become prominent in the enterprise segment.
What do you expect to deliver as a result of the cooperation with Microsoft this year?
It's more like 2011. We are starting to see certain benefits already. But it's really about 2011. We are not talking about only porting existing business applications and services on top of a mobile platform, but we are talking about co-creating as well.
The analyst Michael Gartenberg was recently quoted as saying, "Nokia failed to lead a changed market and has been forced into reacting to competitors instead of driving its own vision of the future." Is it a fair criticism?
If I think about the way we have led, for example in the area of turn-by-turn navigation, but I could expand that to cover building content, software, and services on top of the mobile device, and in that way moving up the stack, we have been more proactive here than anybody.
I think 2010 will turn out to be an extremely important year, when I believe we will be able to take to the marketplace some of the services concepts and content delivery mechanisms that we have invested in during 2008 and 2009. So, yes, we have to move even faster. We have to transform the company even faster. That's fair. But in fact I think we have shown quite a lot of progress here.