Nokia (NYSE:NOK) CEO Stephen Elop indicated that Verizon Wireless (NYSE:VZ) will launch more of its Lumia smartphones running Microsoft's (NASDAQ:MSFT) Windows Phone 8 software, though he declined to give further details. The news sent Nokia's stock up to its highest level since April, according to Bloomberg.
"We are planning a lot of exciting things with Verizon," Elop told CNET in an interview.
In the interview, Elop touched on several issues facing the company, which is struggling to turn itself around after embracing Windows Phone as its primary smartphone platform. The company has made regaining a foothold in the U.S. market a top priority, but so far its Lumia sales in North America have not been robust. Verizon joined AT&T Mobility (NYSE:T) and T-Mobile USA as Nokia carrier partners in the fourth quarter, with Verizon selling the mid-range Lumia 822 for $99.99 with a two-year contract.
Elop discussed why Nokia decided to make its high-end Lumia 920 device--also sold for $99.99 with a two-year contract--an exclusive device for AT&T. The Nokia chief said such deals yield better results for Nokia. However, Elop added there "might be another similar hero exercise with a different operator."
"In a market where subsidy and marketing dollars are heavy, we encourage them to promote it as a hero product, and use the subsidy to drive down the pricing to a competitive point," he said. "It also gives you access to in-store resources. If you get a concentrated effort, you get far more parallel investment and cooperation. As we did the assessment, we came to the conclusion that working with them (AT&T) from the start would yield the best results."
Nokia is struggling to gain traction in the market, though Elop said the company is "certainly pleased" with the response to the Lumia 920, which is available in markets across the globe. He said the company is working to expand supplies and distribution. "You'll see us launch in more and more countries," he said. "We got onstage (back in September during the launch) and said rather boldly that it was the most innovative phone out there. We stand by that statement."
Elop said Nokia will continue to make mapping and location-based services a core part of its offering. He pointed Nokia's City Lens augmented reality application as a unique feature on Nokia's Lumia products. Elop said Nokia is shifting its culture and that there is more urgency within the organization.
"There's been a marked shift towards this challenger mindset," he said. "We have to move with urgency. We have to have empathy and listen to our customers. How do we respond to consumer demand that we haven't done as quickly as before? How do we take those bold steps? How do we disrupt the competition?"
Still, Nokia certainly faces challenges. The company reported shipping 2.9 million Lumia smartphones worldwide during its third quarter, down significantly from the 4 million the company shipped during the previous quarter. In the North American market, Nokia reported shipping 300,000 devices, down from 600,000 in the previous quarter. In a sign of its deteriorating fortunes, at least in smartphones, Nokia fell out of IDC's top five global smartphone vendors in the third quarter for the first time since IDC began tracking the sector in 2004. Nokia shipped 6.3 million smartphones in the third quarter, allowing it to be displaced by HTC and BlackBerry maker Research In Motion (NASDAQ:RIMM).
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