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Nokia reorganizes for second time in six months

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Nokia CEO Olli-Pekka Kallasvuo has announced his second reorganization in six months, indicating the intense pressure he is under to get the firm's smartphone strategy right. The new structure, effective from July 1, is heavily focused on tight integration between software and hardware, especially at the high end but also in emerging market devices. While the main goal is clearly to take on the vertically integrated players like Apple more effectively, the hiring of former Sun software chief Rich Green also points to new impetus behind a longer term, but hugely significant, strategy to create an industry leading cross-platform software framework dominated by Nokia.

In the new structure, Nokia has reorganized its mobile devices business into three units, down from five, in a bid for greater clarity and integration. From July 1, the divisions will be Mobile Solutions for the high end, Mobile Phones for the low end, and Markets (sales and marketing, branding, distribution and so on). Kallasvuo said: "We are decisively moving to respond faster to growth opportunities we expect in smartphones and mobile computers. Nokia's new organizational structure is designed to speed up execution and accelerate innovation."

Last fall, Nokia put in place a restructuring, which broke the overall Devices group into three sections centered on smartphones, mobile computers and low end cellphones. In addition, there was a services unit, focused on Ovi web applications, and a new solutions unit, headed by Alberto Torres. Now smartphones, mobile computers, solutions and services will all be incorporated into a single Mobile Solutions business, focused on integrated high end offerings. Nokia said the devices will be based on MeeGo and Symbian and "will be tightly integrated with Nokia's internet services".

The low end phones unit is less changed structurally, but will also take an integrated hardware/services approach geared to emerging markets, housing key apps such as Ovi Mail and LifeTools. The sales/marketing arm will remain largely unchanged.

The solutions division was hailed at its launch as a recognition that success in smartphones was about more than hardware and apps, and sought to replicate the end-to-end model of Apple and RIM. However, it will now be disbanded after only six months, with its work to be addressed by the overall Mobile Solutions group, which will look to house hardware and software and marry the two together.

As for the leaders of the reshaped divisions, Mobile Solutions will be headed by Anssi Vanjoki, currently chief of sales and marketing. Within his group, Jo Harlow will continue to head the Symbian devices activities, while Alberto Torres, with his solutions division disbanded, will lead a similar group focused on MeeGo products. Also in Vanjoki's group, Tero Ojanpera will run the services aspect. He was previously co-leader of the separate web services group with Niklas Savander, who will take over at Markets from Vanjoki.

Meanwhile, one shock came with the resignation of Rick Simonson, often expected to be a future CEO. Previously Nokia's CFO, and last year appointed to head the mobile phones unit, he brought significant experience and skill to the firm in areas where it truly shines - logistics and operational excellence. As well as running the low end phones unit, where an efficient supply chain is everything, he also revamped company-wide 'strategic sourcing' after Nokia admitted to rare components shortages during its awful third quarter in 2009.

He will retire from full time duties, though continue as a senior adviser, while the new-look Mobile Phones division will be run by a key Nokia high flyer, Mary McDowell. She is currently chief development officer, and has valuable experience in the US and enterprise businesses, both areas where Nokia needs to make headway. Vanjoki and McDowell will report to Kallasvuo.

Kai Oistamo will leave his role as overall EVP for devices - largely focused on R&D and strategy - and will replace McDowell as chief development officer. This move may be partly to make way for some rare new blood, in the shape of a CTO for the Mobile Solutions division, former Sun software chief Rich Green. Many of his responsibilities would formerly have fallen under Oistamo's remit. Nokia tends not to have a corporate CTO, but often uses the title to lure high profile technologists and give them a wide-ranging role. Green is an important hire, given the strategic importance of Java to Nokia, and his expertise in cross-OS software frameworks.

With its two operating systems, Nokia has put increasing emphasis on creating a single software architecture that spans its own platforms and possibly, in future, those of others. Trolltech, which brought Qt into the fold, was the first vital step and is already starting to produce results, and Nokia has also been hugely active and influential in mobile Java and the open source Eclipse IDE (integrated development environment), and is starting to make progress in open web tools that use the browser and HTML5 to span different operating systems. With such cross-platform strategies (we would also include its close alliance with Adobe) lies the route to seize the initiative from Apple and match Google's open credentials.

Copyright © 2010, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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