Nokia Missed Smartphone 'Revolution'

3 May, 2012

Nokia will launch a range of tablets and "hybrid" smart mobile devices as it seeks to turn round the fortunes of its ailing handset business, chairman Jorma Ollila has told the Financial Times.

In the week that he leaves the mobile phone company after 27 years, Mr Ollila said Nokia could bounce back from its recent slump in sales and profits with exciting "form factors" for devices and exclusive services.

Mr Ollila took Nokia from a struggling Finnish industrial group with a market capitalisation of €650m to become the world's largest phonemaker with an equity value of close to €300bn in the space of a decade after he took over as chief executive in 1992.

However, the company has struggled since 2008, after failing to create a competitive platform for higher-margin smartphones in the face of competition from Apple and Samsung, coupled with a more recent decline in sales in core emerging markets as it battles cheaper Asian handset makers.

Last week Samsung overtook Nokia as the largest vendor of handsets in the world after 14 years.

Mr Ollila admitted that the company had been too slow at the start of the smartphone revolution, when phones started to become connected to the internet and needed software platforms, even after identifying this as a key trend in 2006.

However he said that the combination of new products and Nokia services would "make a difference". Mr Ollila said the company was now "on time" with product delivery. "Tablets are an important one, so that is being looked into, and there will be different hybrids, different form factors [handset designs] in the future."

He backed the decision of Stephen Elop to forge a partnership with Microsoft to produce smartphones on the software company's Windows platform, which was his first strategic move as chief executive last year. However, sales have so far struggled to dent the dominance of Apple and Samsung.

"[I am] happy with what is happening. When you have such strong competitors in the marketplace it will take a bit of time but things are going well," he said.

"Four years from mid-2008 to today the returns have not been where they should have been. The company saw it and it was broadly accepted but the software capability and particularly the platform software knowhow was not there.

"The competitors were faster, and bringing their solutions to the marketplace faster."

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