Nokia has undergone a lot of changes over the years, adapting itself sometimes because of market challenges and sometimes for what it sees as opportunities. It made quite a few changes in 2004 when it created four major divisions for enterprise, networks, phones and multimedia. Earlier this year it cut 700 jobs in areas it thought needed trimming, with about half those in its enterprise division.
The Finnish company is changing again—this time putting more form into some of the function it has been developing. Nokia has been adopting a services and content approach steadily over the last few years with its handsets, adding increasing camera functionality, music and GPS-based location. This week it made this trend part of its formal structure.
Instead of the four divisions (Nokia Networks is now a joint venture with Siemens), there will be three. An obvious one is Devices. The other two are Services and Software, and Markets.
Services and Software will include enterprise solutions, as well as what appears to be an emphasis on offering more consumer Internet services on mobile phones. Mary McDowell, who had been hired to run the enterprise unit, now is going to become chief development officer. One has to wonder what will happen to the enterprise solutions group, since it apparently has been downgraded in the new structure.
Nokia's restructuring shows the direction the industry has been taking in recent years. It is becoming more about content and services than just networking. Software is starting to play a bigger role.
There won't be any job changes at the very top under the new plan, which goes into effect next Jan. 1. CEO Olli-Pekka Kallasvuo and Chief Financial Officer Rick Simonson will stay. But Kai Oistamo, head of Nokia's mobile-phones division, will take over the new devices unit, and Niklas Savander will lead the services-and-software division. The head of multimedia, Anssi Vanjoki, will run the new markets unit.