Nokia restructures and names new CFO

Finland's Nokia, the biggest maker of mobile phones, has announced a management shake-up and a company-wide restructuring in a bid to keep rivals at bay.

Nokia is to split into four divisions: Mobile Phones, Networks, Multimedia and Enterprise Solutions. Currently the firm operates three divisions, including Mobile Phones and Networks, with the latter of the two largely unchanged, though its current third division, Nokia Ventures, is set to go.

"With the changes, Nokia will address emerging new business areas in the world of mobility, while continuing to build on its leadership in mobile voice communications," the company said in a statement.

Analysts noted that move is typical for Nokia, which regularly reshuffles its structure to stay on top of market trends. The move also signals a clear focus on multimedia mobile phones, consumer-centric devices that come with cameras, games, video and music functionality.

Enterprise Solutions, meanwhile, will work on phones and applications designed for business, or what Nokia calls "seamless mobile connectivity solutions based on end-to-end mobility architecture".

"With leadership, Nokia is able to concentrate its efforts on what have become clear market segments," Neil Mawston, senior analyst, global wireless practice, with consultancy and research company Strategy Analytics. "It's a kind of spiral. Nokia has built good phones which gave it deep pockets that should allow it to build better phones. It's a cycle that makes it difficult for competitors."

But Mawston acknowledged that there are risks. "The danger is that they may be fighting on too many battle fronts. If they have their fingers in eight on nine different pies, it can become difficult to keep hold of their leadership," he said.

Under the new structure, devices such as Nokia's new multimedia 3650, its music-centric 3300 or the gaming-based N-Gage, will fall under the remit of the Multimedia unit, which will also develop games and applications that are designed for consumers. The Nokia Communicator and the company's new 6800 messaging phone, meanwhile, will be handled by the Enterprise Solutions unit, which will also look after software and applications for linking corporate networks to mobile devices.

The old Mobile Phone division will handle the company's entry-level products, as well as the firm's low cost models for buyers in developing economies.

"The industry and corporate structures that were established a decade ago at the dawn of mobile communications were very different from what is needed going ahead," said Jorma Ollila, chairman and CEO of Nokia. "With our flexibility and the new structure we are truly in the best position to bring the benefits of mobility to everyone and to take the opportunity of the next growth wave in this industry."

Another important move, which came alongside a raft of management reshuffles, was the appointment of Rick Simonson as a board member and CFO, replacing Olli-Pekka Kallasvuo, who will now head Nokia Mobile Phones. It is thought that Kallasvuo may be in line for Ollila's CEO job in a few years. Ollila is widely credited with turning the Finnish firm into the wireless powerhouse it is today.

Matthew Clark writes for ENN electricnews.net.