Nokia CEO: Go Long! Get Open!

SANTA CLARA, Calif. -- The acquisition of Symbian Ltd. isn't just about operating systems. It's a power play aimed at leading the cellphone industry's charge into the services side of the business, Nokia Corp. (NYSE: NOK) CEO Olli-Pekka Kallasvuo told a dinner crowd here last night. (Click the image below for a slideshow of the event.)

It's not fair, then, to say Nokia's $411 million Symbian buyout is just protection against Google (Nasdaq: GOOG) and its open-source Android platform. (See Mobile OS Wars: Nokia Snaps Up Symbian and Symbian Wants the World.) Rather, this is Nokia going on the offensive, trying to beat the competition to the future of the mobile industry.

"The boldness of the move, I would say, is an indication that it is not a defensive move at all," Kallasvuo said.

Kallasvuo was interviewed on stage by Forbes publisher Rich Karlgaard (substituting for a bronchitis-ailed Walt Mossberg) in a dinner event set up by Silicon Valley's Churchill Club.

Questioned on how "open" Symbian would be, Kallasvuo said it Could! Go! All! The! Way! (It's a football catchphrase -- apologies to Chris Berman.) What he means is Symbian will be fully open-source and available to all, no strings attached.

Kallasvuo described the open-source obsession as a way to cope with a changing mobile industry, where competitors are parachuting in from the computing world and handsets are becoming less important than services. "As technologies develop, as the processing power in small devices increases, as the power is managed in a more efficient way... it is not necessarily any more a technology question," he said.

He cited the BlackBerry as an example. Nobody gets a BlackBerry because of its microprocessor speed or battery life. The device is popular because of the service behind it. Kallasvuo contended Amazon.com Inc. (Nasdaq: AMZN) used that line of thinking in creating the Kindle reading device: "It's not a technology problem Kindle has solved."

The future for Nokia, therefore, lies in being able to peddle services -- or, at least, BlackBerry-like usage habits -- in addition to handsets. Kallasvuo is dead serious about this and tried to make it clear that this change is starting at the very heart of Nokia. "We are not in the services part in order to support something else," he said. "This mindset is extremely important. We are betting on both [handsets and services] in a major way."

(The services part has yet to generate any meaningful revenues, he added.)

He cited Proctor & Gamble as a role model: an old, crusty corporation that took the bold step of posting questions and problems for anybody to answer, hoping to tap a wider range of thinkers. "All this openness means you're exposed, yes. You've got no hiding place. But you can harness the innovation," Kallasvuo said.

— Photos by Don Feria/Getty Images. Story and captions by Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 3:30:21 PM
re: Nokia CEO: Go Long! Get Open! There's a shallower, lower-margin way in which handset makers will have to differentiate: Coolness. Colors, shapes, clever foldup/twisty parts. I'm sure Nokia is more than aware of this but it didn't happen to come up in the talk.

Apple has this nailed, of course; it's their greatest strength. But Nokia has plenty up its sleeve too -- Kallasvuo did make a passing reference to the foldable nanotech materials we've seen in this video:
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