Despite its worldwide leadership in the handset market, the company's chief executive describes how Nokia is building its U.S. business beyond cell phones.

Marin Perez, Contributor

October 1, 2008

4 Min Read

Nokia CEO Olli-Pekka Kallasvuo

Nokia CEO
Olli-Pekka Kallasvuo

Source: Nokia

Nokia is the world's largest cell phone and smartphone manufacturer by far, but the company will not be resting on its laurels, CEO Olli-Pekka Kallasvuo told InformationWeek.

The company is in the midst of branching out to offer additional services and applications like multimedia, navigation, gaming, and location-based services. Nokia's CEO said he sees this as a way to not only draw more customers to Nokia handsets, but as an additional revenue generator.

"The industry as whole is in the middle of a transformation, and it's a very exciting time," said Kallasvuo. "It's moving from a device industry to an experience industry, and we're making a conscious long-term effort to capitalize on that."

Using music as an example, Kallasvuo said some Nokia handsets have long been capable of playing music. But the process for getting tunes on the handset could be frustrating, or mobile music services weren't living up to expectations. With this in mind, Nokia has recently launched its "Comes With Music" program, which offers certain Nokia users free, unlimited music downloads for a year.

The company will use its Ovi platform as a main door for its increased offerings of services and applications. But as handsets become convergence devices, Nokia knows this means industries will collide. For example, in the United States, Nokia's music service could be seen as a competitor with Verizon's and Sprint's own over-the-air music services.

Additionally, companies like Apple and Google are putting a strong emphasis on mobile applications with the Apple App Store and the Android Market. Nokia said it's in a unique position to implement these services because of its broad base of consumers and large portfolio of handsets.

"In our case, we've got 1 billion people using Nokia devices as we speak," Kallasvuo said. "This is clearly a strong foundation to extend these services, and no one else has this kind of foundation."

Additionally, Nokia's size means it will be able to make large investments -- like the $8.1 billion acquisition of Navteq -- that some of its competitors won't or can't do. In the last year, Nokia has purchased Twango, Plazes, and OZ to beef up its social networking, messaging, and location-based services. Nokia made a major move earlier this year by purchasing the remaining shares of Symbian it didn't own and spinning it off into the Symbian Foundation. The new foundation was created with the goal of making the OS a royalty-free, open source mobile platform.

The open source operating system will combine elements of the Symbian OS with Nokia's S60, DoCoMo Mobile Oriented Applications Platform, and UIQ to create the new mobile platform. The foundation also features many heavyweights in the mobile industry, including AT&T, Broadcom, and Samsung.

The first handsets with the new Symbian OS are expected to be available in 2010, and Kallasvuo said the goal is to get the OS bigger, better, and faster by harnessing the innovations of an open environment.

"When you compare it to other competitors in the market, many of them are not constructed in a way where the openness is complete. This will have no hooks or disclaimers," Kallasvuo said.

But Google is making a strong push in the mobile industry with its open source Android platform, and the recently introduced G1 handset has piqued the interest of some consumers and developers. Kallasvuo did not address Android directly, but said he believes the track record of Symbian will make it a more compelling OS than open source rivals.

"Symbian will be open and mature, and if you look at the size, industry support, ecosystem, and developer activity ... it's second to none," he said.

With the iPhone 3G, BlackBerry, and Android drawing a lot of headlines and attention, the new Symbian may be facing a developer mindshare issue in places like Silicon Valley. TechCrunch's Michael Arrington recently called Nokia and Symbian "irrelevant," despite the fact that both are the global leaders in their respective markets.

Kallasvuo obviously does not agree, and he pointed to Symbian's roughly 60% share of the global market, as well as the thousands of applications that are available. But he acknowledged that both companies have some work to do to combat this perception in certain regions, and said Nokia is actively building and investing to step up its presence in the United States.

This article was edited on 10/3 to clarify Nokia's stance on CDMA technology.

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