Nokia Corp.’s CEO, Olli-Pekka Kallasvuo, isn’t counting out rival Motorola Inc.
Although Nokia has benefited as much as any company from Motorola’s stumbles in the cellphone business during the past two years, Kallasvuo didn’t gloat Tuesday when he addressed the Executives’ Club of Chicago.
“Motorola is facing some challenges,” he said. “But Motorola has always been a tough competitor, and I think they will continue to challenge us in the years to come.”
Nokia, the world’s largest seller of mobile phones, established a beachhead in Chicago last year when it decided to buy locally based Navteq Corp., a digital-mapping company, for $8.1 billion. Location-based services are a crucial component on Nokia’s strategy to sell mobile services, such as music, and to serve up advertising-based content on top of its ongoing phone business.
Kallasvuo has his own challenges.
While Nokia has boosted its worldwide market share to 40%, the company has been struggling in North America even as Samsung Electronics Co. Ltd. and LG Electronics Co. Ltd. have showed strong growth. Nokia also hasn’t kept pace in the fast-growing market for smartphones, as Research in Motion Ltd., HTC Corp. and Apple Inc. have capitalized on soaring demand.
The Finland-based company’s stock is trading at about $20 per share, down 22% in the past two months and off 44% from a year ago.
Kallasvuo, who recently warned that Nokia would not see growth in market share this quarter as originally forecast, declined to say how the recent shocks to worldwide financial markets would impact results.
“There are some economic realities we all face,” he said.
Kallasvuo also acknowledged the launch Tuesday of the first handsets that will use the Google Inc.-led Android software platform. Unlike Motorola and the other big phone makers, Nokia is not part of the Open Handset Alliance building the software.
“We welcome the competition,” he said, adding that Google and Apple will help expand the market for high-end phones that can take advantage of the services Nokia is trying to develop with Navteq.
John Pletz is a reporter for Crain’s Chicago Business, a sister publication to RCR Wireless News. Both publications are owned by Crain Communications Inc.
