During Nokia's annual shareholder meeting yesterday, CEO Olli-Pekka Kallasvuo seemed to change the direction of the entire company. "Our goal is to act less like a traditional manufacturer, and more like an internet company," Kallasvuo told his shareholders. "Companies such as Apple, Google, and Microsoft are not our traditional competitors, but they are major forces that must be reckoned with. Make no mistake: We are taking on these challenges seriously and aggressively."
That's a refreshingly open-minded attitude from the leader of a global technology powerhouse. Kallasvuo is effectively saying that the times, they are a-changin', and Nokia must look in unexpected places for the ideas that will take the company into the next paradigm. All three of the mentioned companies are tough competitors with designs on the smartphone (or voice-enabled portable computer) market.
To get started in that transition, Nokia has reorganized into two reportable segments: devices and services, which is the sum of three divisions under the previous system (mobile phones, multimedia, and enterprise solutions) and an unchanged Nokia Siemens networks segment, also known as infrastructure. The pending acquisition of GPS specialist Navteq promises to take Nokia into new markets, such as navigation systems for pedestrians and location-based mobile advertising.
"When we look at it with the eyes we have now, when regarding pedestrian navigation, map services, digital maps, we are even more excited about the opportunities than when making the decision" to buy Navteq, said Kallasvuo. "I ask for some more patience from the shareholders. There is quite a lot better to be seen ahead."
It sounds like Nokia is going to spend less time on hardware design, new distinct handset models, and so forth (though I'd be shocked if the company gave up on hardware entirely), in favor of more and better software. We may be headed for a future where hardware platforms have mostly cosmetic differences and different usability choices, and the real difference lies in the included or installable software—and Nokia may have a leg up with its Comes With Music initiative. Nokia is up against the ever-popular BlackBerry interface, Apple's iPhone smash hit, and Google's upcoming Android openness. Will Nokia shoot for business dominance or consumer-level features? Given the excitement about Navteq, I suspect it's more of the latter than the former.
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