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Nokia Reorganizes, Plans Windows Phone Focus

2/21/2011 12:01:00 AM Eastern

LONDON — Nokia unveiled a major reorganization
plan, a new management
team and a broad strategic partnership
with Microsoft to rebuild market share,
particularly in smartphones.

Nokia president/CEO Stephen Elop
outlined the changes to investors during
a meeting earlier this month, here.

Under the Microsoft partnership, Nokia
will adopt Windows Phone as its primary
smartphone platform and help bring Windows
Phone to a larger range of price points, market
segments and geographic markets, the company said.

The partnership also means that Nokia and Microsoft
will “closely collaborate on joint marketing initiatives
and a shared development roadmap,” Nokia announced.

Elop said, “Today we are accelerating that change
through a new path, aimed at regaining our smartphone
leadership, reinforcing our mobile device
platform, and realizing our investments
in the future.”

The new strategies will take time to pay
off, Elop said Nokia expects 2011 and 2012
to be “transition years” as the company invests
to build the planned Microsoft system.
After the transition, Nokia is targeting handset
and mobile services sales to grow faster
than the market and targets an operating
margin of 10 percent or more.

As part of the Windows Phone focus,
Nokia will relegate Symbian to a “franchise platform”
and focus on transitioning the current 200 million
Symbian users to other devices. Despite the Symbian
de-emphasis, Nokia said it nonetheless expects to
sell about 150 million more Symbian devices “in the
years to come.”

Nokia will also turn its MeeGo platform, developed jointly with Intel, into an open-source, mobile operating
system. Nokia said it still plans to ship a MeeGo-related
product later this year.

In feature phones, the company will “leverage its innovation
and strength in growth markets to connect the next
billion people to their first Internet and application experience,”
Nokia said.

As part of the Microsoft-Nokia collaboration:

• Nokia will contribute its expertise in hardware design
and language support to the Windows Phone OS.

• Nokia will adopt Microsoft’s Bing search engine
across its devices and services, with Microsoft’s adCenter
advertising platform providing search advertising services
on Nokia devices and services.

• Nokia Maps will become a core part of Microsoft’s
mapping services, with Nokia Maps being integrated with
Microsoft’s Bing search engine and adCenter advertising
platform for local search and advertising results.

• Nokia’s content and application store will be integrated
with the Microsoft Marketplace store.

To accelerate decision making and the introduction
of products and services, the company made wholesale
changes to its management team and restructured its
operations. The company divided itself into two business
units: smart devices, which focuses on high-end smartphones,
and mobile phones, which focus on mass-market
mobile phones. Each unit gets profit-and-loss responsibility
and “end-to-end accountability for the full consumer
experience.”

The smart devices unit, led by Jo Harlow, now incorporates
three existing units: Symbian smartphones, MeeGo
computers and strategic business operations. The mobile
phones unit, led by Mary McDowell, will focus on geographic
growth markets “to connect the next billion people
and bring them affordable access to the Internet and
applications,” the company said.

The markets unit, headed by Niklas Savander, will be
responsible for sales, marketing, communications, customer
care, manufacturing, IT and logistics.

The services and developer experience unit will be responsible
for Nokia’s global services portfolio, developer
relations and service-partner offerings.

The Navteq map organization will continue as a separate
reporting entity.

The new CTO office will be responsible for Nokia’s
technology strategy and Nokia Research Center. It will be
headed by Rich Green.

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