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Nokia CEO: Symbian Is Catalyst for US Market

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11/17/2008
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Nokia Corp. (NYSE: NOK)'s chief executive, Olli-Pekka Kallasvuo, believes the planets are finally aligned for the company to move aggressively in the U.S. market, where it commands just a 6 percent market share compared with its global share of 40 percent.

Last week, Nokia said it expects its global shipments to slip slightly. This week, Kallasvuo said Nokia is ramping up to attack the U.S. market where it traditionally addressed only the GSM-infrastructure markets -- AT&T Inc. (NYSE: T) and T-Mobile US Inc. .

"We are only ramping up now our presence with Verizon ," Kallasvuo said in an interview in The Boston Globe. Verizon Wireless uses CDMA2000 technology, which has been closed to Nokia until recently.

"We are investing more in the U.S. market," he continued. "We are expanding our research and development activity in San Diego. We've got lots of people there designing phones now that are specific to the U.S. needs and the U.S. market."

Nokia is basing its future on its Symbian operating system, and Kallasvuo noted that the company recently made it "fully open." He also observed that Symbian has had 10 years of solid development behind it, as he compared it to Google's Android operating system, also open, but only in existence for a few months. "Our approach is based on the Symbian operating system."

Nokia has been picking its way through the U.S. wireless minefield for years and only in recent months has it shown signs of being able to navigate the minefield. A key development was its intellectual property settlement last summer with key patent holder Qualcomm Inc. (Nasdaq: QCOM), after years of bitter litigation. The new agreement is for 15 years, and Nokia is establishing better relations via its new San Diego plant with Qualcomm.

Suddenly the CDMA market in the United States looks inviting to Nokia. Verizon's pending acquisition of Alltel Corp. (NYSE: AT) will make the combine the largest U.S. cell phone service provider and open up an entirely new market opportunity for Nokia. Now it can work amicably with Qualcomm, which developed the CDMA infrastructure and intellectual property. And there is another void to be filled -- Motorola's collapse in the U.S. cell phone market. The company's handset market share has plunged.

What about LTE? Kallasvuo was asked. "We are supporting LTE," he said of the planned next wireless infrastructure generation that has been selected by Verizon, AT&T, and most cell phone service providers in the world for their next-generation infrastructure. "We can look at LTE as starting to happen in the early part of next decade."

Turning to the broader wireless market, Kallasvuo said Nokia will continue to address all segments of the market, from low-cost devices for emerging markets to high-end smartphones, as well as all infrastructure technologies including WiMax.

— W. David Gardner, InformationWeek

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