Having created a vast handset portfolio that did more to confuse potential purchasers, Nokia has admitted that its smartphone line-up needs a drastic pruning and plans to reduce its range of smartphones by 50 per cent.
Perhaps recognising that Apple managed to capture 3 per cent of the high-end market with the iPhone, Nokia says it will simplify the product range to allow the company to put more effort into fewer products. This effectively means cutting R&D and production costs by focusing on a smaller number of high impact smartphones.
Antti Vasara, head of Nokia's smartphones R&D, said the company could now put more effort behind the fewer products. "We have cut down unnecessary differentiation, so that we have a far more focused portfolio for next year."
Ian Fogg, an analyst at Forrester, commented that the move indicated Nokia being aggressive with its strategy in the smartphone market, rather than turning its back on it. "By reducing the number of models in its portfolio, Nokia is making it easier for developers to target its devices with applications that will work across all models." Fogg also suggested that a clearer product focus would give Nokia a far better marketing position around which to push its products in 2010.
A further sign of the times is Nokia's announcement that it will close its flagship Regent Street store in London, after disappointing sales. In a statement, the company said: "Nokia is crystallising its branded retail strategy, aiming at improving operational efficiency of its retail network. This requires revamping of the retail network."
Last year, Sony Ericsson closed its only UK-based flagship retail store after the outlet failed to turn a profit.
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