Report: Nokia Chief Says Large Acquisitions Over
HELSINKI (AP) — Nokia is done making major acquisitions to complement its business and will provide more online services, its CEO Olli-Pekka Kallasvuo said.
Kallasvuo was quoted in an interview published Friday as saying that the Finnish company has "collected all the basic building blocks" and now aims to push ahead with innovations, despite the challenging climate that saw Nokia lose market share last year.
"Now in 2009, consumers must be able to even better realize that the user experience provided by Nokia is exquisite," Kallasvuo told the Finnish Talouselama business weekly. "We no longer lack the pieces which would require large acquisitions."
Nokia has been the top global handset maker since 1998 and has gradually expanded to include online services, such as downloads of music, games, maps and the fast transfer of photos and video.
It has estimated the global online market will reach $130 billion by 2010.
"We are in a situation where we have to combine the old ... with the new," Kallasvuo told Talouselama. "We are no longer just the market leader which needs to defend its position. Now, we have the opportunity to attack in a new way."
Last year, Warner Music Group joined Nokia's music service, enabling customers to download and listen to thousands of tracks on Nokia handsets, following similar deals with Sony BMG and Universal Music Group.
It also acquired Canadian mobile messaging company Oz Communications to give users better access to instant messaging and e-mails, and joined forces with travel information company Lonely Planet to sell maps and city guides that can be accessed on mobile phones.
In 2007, Nokia spent $8 billion - its biggest deal to date - to acquire Chicago-based Navteq so that Nokia handset users can access digital maps and global positioning systems.
Its foray into Web services, spending more than $3.8 billion on research and development last year, is part of a strong push to challenge rivals, including Apple's iTunes and iPod.
Kallasvuo concedes Apple's iPhone served as a wake-up call.
"Of course, I've used Apple as an in-company alarm clock, several times," Kallasvuo said in the interview. "I've familiarized myself with it (iPhone), but naturally I don't use one."
The global economic downturn has not spared the company. Last month, it warned of imminent cost-cutting measures after fourth-quarter net profit crashed 69 percent to $744 million and its market share dropped to 37 percent, from 38 percent in the previous quarter and 40 percent in the fourth quarter of 2007.
On Wednesday, Nokia announced the closure of an R&D center in Finland with 320 job cuts and said it will temporarily lay off some 2,500 workers.
But Kallasvuo maintains the company is not in crisis, although he acknowledges the market is difficult.
"We are now in the toughest environment ever," Kallasvuo said. "Nokia is no way in a crisis, but the challenges are huge."