Nokia: 10% cellphone growth, revamped Symbian

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Nokia: 10% cellphone growth, revamped Symbian

By CAROLINE GABRIEL

Published: 3 December, 2009

At its annual Capital Markets Day in Helsinki, Nokia pleased the market as whole, forecasting 10% growth in the handsets market in 2010, which would do more than just redressing the losses of the past year. About its own prospects, it was characteristically cautious, and its overall theme was that 2010 would be one of transition to its new role as a web services provider.

Key pieces in this strategy would slot into place, especially on the open Symbian front, as well as a revamped smartphone range - though the year would be one of building on the foundations laid this year, such as Ovi and the cross-platform tools, not making radical U-turns (no, Nokia won't sell off its hardware business in the foreseeable future, nor will it dump Symbian for Maemo. It probably won't buy Palm either, just to complete the round-up of recent rumors. It probably also won't sell off Nokia Siemens, though that might be advisable).

"Going into 2010, the overall mobile devices market is stabilizing, and it is growing more in the areas where Nokia has competitive advantages," the firm's new CFO, Timo Ihamuotila, said in a statement.

However, Nokia does not think it will achieve its usual target of 40% global market share next year, but will instead remain around the 38% mark where it has hovered in 2009. Its main priority will not be chasing market share at the cost of margins, but focusing on stabilizing average selling prices for handsets, which have slipped during the downturn (from €72 in the third quarter of 2008 to €62 a year later, though at least this figure had stabilized since March).

Far higher growth, though from a small base, is expected for the Ovi services, which Nokia says will generate €2bn, and reach 300m active users, in 2011. Downloads of apps from the Ovi Store are growing by 70% a month, says Nokia, making it second only to App Store, and each registered Ovi user has downloaded an average of eight apps. The number of users downloading apps is going up by 50% a month, helped by strong focus on personalization and localization, to make items more relevant and easier to discover. The company wants to localize the Ovi Store for 20 countries by the end of the first quarter of 2010. This localization is particularly important in emerging economies - Nokia says it is seeing huge uptake in markets like India, Brazil and Mexico, especially in music download, because many people do not have PCs and are using their phones to download music.

CEO Olli-Pekka Kallasvuo said the company has met or exceeded its plans to reduce operating expenses this year, cutting its opex run rate by about €1bn in 2009. For 2010, it expects its opex in the devices and services unit to be about €5.7bn. As many handset categories commoditize, and Nokia relies more on merchant chip vendors and ODMs, it is getting some of the savings from R&D streamlining, and in 2010, it plans to bring R&D spending under 10% of net sales in devices and services.

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