Nokia will increasingly look to include more applications and services in its phones, such as navigation and messaging, as a way to shore up its position in the market. The world's largest handset maker pledged to innovate by striking out as a services company, even as some analysts questioned the company's ability to move beyond its traditional role as a bulk supplier of low- and mid-range phones.
Nokia CEO Olli-Pekka Kallasvuo said the company plans to have 300 million users of its mobile services by 2011. In addition, Nokia CFO Rick Simonson told Dow Jones Newswires that the company's leadership in areas such as navigation--Nokia announced in 2007 its acquisition of digital mapping company Navteq for $8.1 billion--gives it a leg up over rivals such as Apple and Sony Ericsson. However, Simonson said that Nokia would maintain a focus on the lower end of the market as well.
The company, which retains the worldwide lead in smartphone market share, has come under increasing pressure in the smartphone arena. Geoff Blaber, a CCS Insight analyst, told Forbes that Nokia "doesn't have any really competitive products at the high end of the portfolio" to compete with the likes of Apple's iPhone or the Palm Pre. The threat of remaining stagnant and shunning innovation looms, according to Jeffries and Co. analyst Lee Simpson, who told Forbes that this is a "Motorola moment" for Nokia, hinting that the company risks the same fate as Motorola, which rested its laurels on its Razr phone.
In other Nokia news, the company announced that Accenture would acquire its Symbian Professional Services unit, which is responsible for Symbian OS customer engineering and support. Terms of the deal were not disclosed, but the companies said they expected it to close by the end of the third quarter.
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