Mobile phone biz will resist Dell-ification – Nokia CEO

To PC or not to PC


Nokia CEO Jorma "Jurma" Ollila brushed aside comparisons between the mobile phone and PC industries today.

In his introduction to eight hours of presentations by Nokia to financial analysts in New York, Ollila sought to dampen predictions that phone makers would become low margin box-shifters in the future.

Nokia's flurry of recent announcements - touting its own software offerings with its OMA (Open Mobile Architecture) platform pitch, and services - have seen speculation that Nokia would move away from a business that's being increasingly commoditized and open.

"It is not correct that we see a PC low-value hardware business model: we will ensure this will not happen" said Ollila.

"The phone will not be a commodity. Technical advances are slowing down, we hear - but this is not the case. There is no slowdown in the technical advances in RF, hardware, software and integration."

He explicitly went out of his way to de-emphasise the importance of software alone in the mix. That's a sideswipe at Microsoft, of course - but it also serves to highlight Nokia's own integration, hardware and product design skills. And these are skills that aren't really needed in today's low-end PC business, where integration skills mean not dropping the screwdriver.

"You will get it all wrong if you talk about software and forget about the hardware," he said.

"People say product differences are disappearing - this is not the case. We don't see competitors catching up. People say we'll have phones on one chip - this is not the case," he said.

Which is odd, as the Nokia 9210 Communicator - which featured in almost every slide in the presentations - is a "one chip" phone, running NOS as the primary OS and the Symbian OS as a thread. And the Hilden communicator is believed to adopt a similar approach.

Ollila clearly wanted to put the breaks on talk of Nokia moving away from its biggest money earner: handsets.

3G a Money Spinner

Nokia said that it will see significant revenues from 3G WCDMA next year, bringing a dual mode 3G handset to market in the second half of next year. Hutchison yesterday confirmed that it will roll out dual mode 3G handsets from NEC in Q4 2002. Nokia said most of the ramp from terminals, rather than carrier deployments of 3G would take place in the first half of 2003.

And Ollila said he wasn't worried by the slow take-up of wireless data: "they're adopting the same wait-and-see mode that did happen with GSM in 1991 to 1993. It's a similar learning curve."

Nokia also announced that Matsushita was testing the Series 60 side of its OMA offering: that's the one that runs on Symbian smartphones (a parallel bundle offers similar software for cheaper text mode phones). Matsushita is a Symbian shareholder, and "evaluating" is some way short of being a licensee for OMA. But Nokia is determined to maintain the blizzard of publicity around the platform, and is expected to unveil real licensees next week.

Analysts were keen to see what Nokia views as the key differentiators against .NET, and what it will do with Club Nokia. For the latter we'll have to wait until this afternoon, Eastern Time.

But without mentioning The Beast by name all morning, Nokia said it had 20,000 R&D staff, half of whom worked in software. And it talked about "open, non-proprietary architectures" where the user has control of authentication and services. Then it reminded everyone how code size, energy consumption and reliability - not Microsoft's strongest mobile assets - were important. "It's a very important distinction to look at the competencies between companies," said Nokia President Pekka Ala-Pietilä.

There was one tantalising detail which showed up how the different the world views of Nokia and Microsoft really are. In his session, Ala-Pietelä predicted a services market worth E810bn, of which transactions account for a mere two per cent. In the Hailstorm scheme of things, the Vig - which goes direct to Redmond - as we understand it, it's significantly higher.

We'll update this as the day continues. ®

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