Nokia Expanded Far Beyond Its Core Device Business

• Posted: Friday, January 04, 2008
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• Author: pradhana
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• Filed under: Mobile Content, Mobile Services, Nokia, White Space

Phone companies just made phones? That strategy no longer works in today’s Internet-accessing, mobile-gaming and MP3-playing world - and it definitely won’t work in 2008. That’s why Nokia, the world’s largest phone manufacturer, is in the midst of a reorganization it says will help the company grow beyond phones and cellular equipment.

The new corporate structure, which takes effect January 1, 2008, will divide the Finland-based company into three main units: Devices, services and software and markets. It’s the services and software part that stands out for a phone manufacturer - typically more concerned with churning out devices than with providing services.

"We are constantly thinking beyond the phone," said Nokia CEO Olli-Pekka Kallasvuo in summer 2007. "Devices alone are no longer enough." Nokia expanded far beyond its core device business last year, introducing new web, music and gaming services in concert with new handsets.

The reorganization is just part of newish CEO Olli-Pekka Kallasvuo’s overall strategy of morphing Nokia into a mobile Internet company, not just a phonemaker.

“The convergence of the mobile communications and Internet industries is opening up new growth opportunities for us, both in the devices business as well as in consumer Internet services and enterprise solutions,” Kallasvuo said last June when he first announced the reorganization.

Since he took on the chief executive role in 2006, Kallasvuo’s already led Nokia through several software and services-related acquisitions - including digital mapmaking giant Navteq, photo-sharing service Twango and Avvenu, a Palo Alto, Calif.-based company that lets users access content on their PC via cell phone.

He’s also announced the launch of Ovi (which means “door” in Finnish), a one-stop Web portal which will combine Nokia’s various mapping, music, gaming and other mobile services. Some Ovi offerings are already available to wireless users in the United Kingdom, but recent software delays have forced the company to postpone the launch of one of its most anticipated services - a mobile gaming platform called N-Gage. /FD

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