Nokia talks service strategy

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Nokia president and chief executive Olli-Pekka Kallasvuo (pictured) outlined the company’s future strategy at its annual general meeting this week, with key focuses including bringing smartphone features to more mid-range handsets and “solutions-centric” business models, while ultimately increasing retention.

Said Kallasvuo: “Nokia is fundamentally changing its business model to transform both the company and the industry. While we continue to compete with the traditional mobile device manufacturers, we also are dealing with new competitors entering the market from the PC and internet industries.
 
“To succeed in this new environment, we need to offer consumers irresistible solutions that improve their lives. Last year we took many steps to ensure we maintain our strong leading position in the device business, while increasing our focus on solutions-centric business models. We have focused our services investments on five primary categories: maps, music, messaging, media and games. These are the areas where the biggest opportunities lie.”
 
Mr. Kallasvuo said the company was looking to combine “unique” services with high-quality devices to increase customer retention and add value.
 
“Our estimated consumer retention rate of around 55 percent is almost twice the rate of our global competitors. This is a substantial achievement and shows we have made significant progress with our solutions approach during the past year,” he said.
 
Kallasvuo said Nokia sees further opportunities as consumers trade down to less expensive devices as a result of the recession. “We believe that mobile computing should not be limited only to expensive, high-end devices. Expanding the Symbian operating system into lower price points is the right thing to do. We see this as a tremendous opportunity to increase efficiency, to get more scale for Symbian, and gain market share.”
 
He added that success in the changing business environment would require “courage” and a “shift away from the conventional”: “We have to work together with certain competitors, new players and partners in new ways. We have to compete and co-operate. We are working more closely with many other companies, including operators and partners.”
 
Kallasvuo also commented on the company’s cost-cutting procedures: “We are scaling our operations accordingly and making sensible but fundamental changes in the way we work. The results of our cost-savings program are not giving us one-off savings for the short term; these are long-term changes with long-term savings. But it is very clear we have to continue to invest in our future, but at a more appropriate pace.”
 
Kallasvuo said that despite the predicted contraction of the global device market this year, he was optimistic for the future of the industry. “Mobile devices are becoming true mobile computers and consumers increasingly are more willing to use them in new ways with new services,” he said.

 

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