Nokia Looks to Internet Services for Growth

The world's largest cell phone maker is planning a music service with unlimited downloads for one year.

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Nokia is looking to mobile Internet services as the engine that will drive the expected 16- to 17-percent growth in operating margins over the next two years.

Speaking at the company's annual investor event in Amsterdam, Netherlands, CEO Olli Pekka Kallasvuo said Dec. 4 that he expects Nokia's Devices & Services Division operating margin to be about 20 percent within the next two years. Nokia expects worldwide mobile device volumes in 2008 to grow about 10 percent from the 1.1 billion or so units the company estimates for 2007.

In addition, Nokia anticipates the 4 billion global mobile subscriptions mark will be reached in 2009, rather than in 2010 as previously predicted.

"We have made great strides in strengthening Nokia's device portfolio over the past year," Kallasvuo said. "The improvements we've made have driven the profitable growth and market share gains Nokia has enjoyed in 2007, and we aim to continue the good momentum in our device portfolio next year."

Kallasvuo predicted Nokia will ship about 200 million devices with integrated digital cameras in 2007, and the company plans to move about 145 million Nokia music-enabled devices.

Convergence, he said, is the key.

"Nokia's goal is to be the world's number one [vendor] in bringing the Internet to mobile devices," Kallasvuo said. "We are at the dawn of a new era in mobile communications driven by the rapid convergence of the Internet and mobility, and Nokia is setting the pace of change."

As part of Kallasvuo's presentation, the company unveiled its Nokia Comes With Music initiative, a program that allows people to buy a Nokia device with a year of unlimited access to millions of tracks. Once the year is complete, customers can keep all their music. The program will launch with Universal Music Group International. Nokia is in discussions with the remaining major international labels.

"We set out to create the music experience that people are telling us they are looking for-all the music they want in the form of unlimited downloads to their mobile device and PC," said Anssi Vanjoki, executive vice president and general manager of Nokia Multimedia. "Even if you listened to music 24 hours a day, seven days a week, you would still only scratch the surface of the music that we're making available."

Vanjoki also gave a further glimpse into Nokia's upcoming Ovi Internet services platform. Ovi, which means "door" in Finnish, allows users to access their existing social network and mobile content by acting as a dashboard.

"Ovi combines the mobile, PC and Web environments into an easy-to-use experience with common user interface elements that provide consistency and simplicity," said Vanjoki. "We started the Ovi services rollout with the individual services in navigation, music and games, and the next step is to provide an integrated experience. The complete Ovi environment and new services will be rolled out continuously throughout 2008."

Nokia officials also said their new Internet radio application is currently available for download for the Nokia N82, Nokia N91, Nokia N95 and Nokia N95 8GB. The service will offer hundreds of Internet radio stations, and browsing can be done based on station name, genre, country or language. Stations selected can be added to a list of favorites.

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